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Exploring green banking performance of Islamic banks vs conventional banks in Bangladesh based on Maqasid Shariah framework

Purpose – Environmentaldegradationhasbeenidentifiedasoneofthemajorimpedimentsfordevelopment in Bangladesh. The World Health Organization has ranked Bangladesh fourth among the most polluted countries in the world. Faced with this challenge, the Government of Bangladesh introduced the Green Financing...

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Main Authors: Julia, Taslima, Kassim, Salina
Format: Article
Language:English
Published: Emerald Group Publishing Ltd. 2019
Subjects:
HG Finance
HG3368 Islamic Banking and Finance
Online Access:http://irep.iium.edu.my/79472/9/79472_exploring%20green%20banking.pdf
http://irep.iium.edu.my/79472/
https://doi.org/10.1108/jima
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spelling my.iium.irep.794722020-09-12T12:00:52Z http://irep.iium.edu.my/79472/ Exploring green banking performance of Islamic banks vs conventional banks in Bangladesh based on Maqasid Shariah framework Julia, Taslima Kassim, Salina HG Finance HG3368 Islamic Banking and Finance Purpose – Environmentaldegradationhasbeenidentifiedasoneofthemajorimpedimentsfordevelopment in Bangladesh. The World Health Organization has ranked Bangladesh fourth among the most polluted countries in the world. Faced with this challenge, the Government of Bangladesh introduced the Green Financing Policy and encouraged banks to participate in offering green financing as part of the efforts to promote environment-friendly economic activities for sustainable economic development. This study aims to examine the financial performance of selected commercial banks that offered green financing in Bangladesh in the period from 2012 to 2014. Design/methodology/approach – In achieving this objective, the paper has divided the various sections of green banking policy under Maqasid Shariah framework of Imam Al-Ghazali, which is preserving faith, life, intellect, posterity and wealth. After that, green performance is compared between five conventional banks and five Islamic banks, according to the secondary data gathered from the annual reports and sustainability reports, as well as verified based on interviews. Finally, based on quantitative and qualitative thematic analysis approach, it is identified which banks meet most of the Shariah objectives along with performingsustainably. Findings – The study finds that none of the banks fully meet the green/sustainable policy requirements; however,the Islamic banks are ahead in preserving faith, intellect and wealth circulation. Research limitations/implications – This research is mostly based on secondary data; banks’ nondisclosure of green data was an impediment to run in-depth and fair comparisons. However, to check the reliability and validity of secondary data, two heads of sustainable banking department from conventional bank and two from Islamic bank have been interviewed. Practical implications – Based on the findings, several recommendations are made on ways to expedite green financing,whichcanultimatelyenhancecontributionofIslamicbankstowardthesustainableeconomic growth of the country while fulfilling Maqasid Shariah. Social implications – Because the green banking policy aim is very much in line with Maqasid Shariah which is the aim of Islamic banks, Islamic banks can presumably contribute more to the sustainable economic growth of the country by aligning their entire operations with green policies. Originality/value – To the best of the authors’ knowledge, this study is perhaps the earliest initiative to compare Islamic and conventional banks’ green performances in Bangladesh. Emerald Group Publishing Ltd. 2019 Article PeerReviewed application/pdf en http://irep.iium.edu.my/79472/9/79472_exploring%20green%20banking.pdf Julia, Taslima and Kassim, Salina (2019) Exploring green banking performance of Islamic banks vs conventional banks in Bangladesh based on Maqasid Shariah framework. Journal of Islamic Marketing. pp. 1-16. ISSN 1759-0833 https://doi.org/10.1108/jima
institution Universiti Islam Antarabangsa Malaysia
building IIUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider International Islamic University Malaysia
content_source IIUM Repository (IREP)
url_provider http://irep.iium.edu.my/
language English
topic HG Finance
HG3368 Islamic Banking and Finance
spellingShingle HG Finance
HG3368 Islamic Banking and Finance
Julia, Taslima
Kassim, Salina
Exploring green banking performance of Islamic banks vs conventional banks in Bangladesh based on Maqasid Shariah framework
description Purpose – Environmentaldegradationhasbeenidentifiedasoneofthemajorimpedimentsfordevelopment in Bangladesh. The World Health Organization has ranked Bangladesh fourth among the most polluted countries in the world. Faced with this challenge, the Government of Bangladesh introduced the Green Financing Policy and encouraged banks to participate in offering green financing as part of the efforts to promote environment-friendly economic activities for sustainable economic development. This study aims to examine the financial performance of selected commercial banks that offered green financing in Bangladesh in the period from 2012 to 2014. Design/methodology/approach – In achieving this objective, the paper has divided the various sections of green banking policy under Maqasid Shariah framework of Imam Al-Ghazali, which is preserving faith, life, intellect, posterity and wealth. After that, green performance is compared between five conventional banks and five Islamic banks, according to the secondary data gathered from the annual reports and sustainability reports, as well as verified based on interviews. Finally, based on quantitative and qualitative thematic analysis approach, it is identified which banks meet most of the Shariah objectives along with performingsustainably. Findings – The study finds that none of the banks fully meet the green/sustainable policy requirements; however,the Islamic banks are ahead in preserving faith, intellect and wealth circulation. Research limitations/implications – This research is mostly based on secondary data; banks’ nondisclosure of green data was an impediment to run in-depth and fair comparisons. However, to check the reliability and validity of secondary data, two heads of sustainable banking department from conventional bank and two from Islamic bank have been interviewed. Practical implications – Based on the findings, several recommendations are made on ways to expedite green financing,whichcanultimatelyenhancecontributionofIslamicbankstowardthesustainableeconomic growth of the country while fulfilling Maqasid Shariah. Social implications – Because the green banking policy aim is very much in line with Maqasid Shariah which is the aim of Islamic banks, Islamic banks can presumably contribute more to the sustainable economic growth of the country by aligning their entire operations with green policies. Originality/value – To the best of the authors’ knowledge, this study is perhaps the earliest initiative to compare Islamic and conventional banks’ green performances in Bangladesh.
format Article
author Julia, Taslima
Kassim, Salina
author_facet Julia, Taslima
Kassim, Salina
author_sort Julia, Taslima
title Exploring green banking performance of Islamic banks vs conventional banks in Bangladesh based on Maqasid Shariah framework
title_short Exploring green banking performance of Islamic banks vs conventional banks in Bangladesh based on Maqasid Shariah framework
title_full Exploring green banking performance of Islamic banks vs conventional banks in Bangladesh based on Maqasid Shariah framework
title_fullStr Exploring green banking performance of Islamic banks vs conventional banks in Bangladesh based on Maqasid Shariah framework
title_full_unstemmed Exploring green banking performance of Islamic banks vs conventional banks in Bangladesh based on Maqasid Shariah framework
title_sort exploring green banking performance of islamic banks vs conventional banks in bangladesh based on maqasid shariah framework
publisher Emerald Group Publishing Ltd.
publishDate 2019
url http://irep.iium.edu.my/79472/9/79472_exploring%20green%20banking.pdf
http://irep.iium.edu.my/79472/
https://doi.org/10.1108/jima
_version_ 1677780671243747328
score 13.211869

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