Abstract
The main aim of the study is to provide an index for
the Islamic banking industry through which the performance of the
Islamic banks can be gauged on the maq¯as.
id al-Shar¯ı‘ah. Accordingly, we suggest an index for the Islamic banking industry based on
the maq¯as.
id al-Shar¯ı‘ah through which the Islamic banks’ performance can be appraised from the maq¯as.
id al-Shar¯ı‘ah perspective.
The index incorporates quantitative and qualitative information of
the Islamic banks and assigns the ratings accordingly. We also
applied the criteria to 5 Islamic banks in Pakistan and computed their
maq¯as.
id al-Shar¯ı‘ah index using detailed information. The index
is used to have a relative evaluation of the Islamic banks regarding
their advancement towards achieving the maq¯as.
id al-Shar¯ı‘ah. To
construct an index, we evaluate the Islamic banking services by the
four maqas.
id namely h.
ifz
.
al-mal¯ , h.
ifz
.
al-¯ım¯an, h.
ifz
.
al-‘aql, and h.
ifz
.
al-nafs. Using the quantitative and qualitative information, the index
shows each bank’s rating. The paper finds that the banks with more
prudent practices regarding the financial performance and Shar¯ı‘ah
compliance fullfil the maq¯as.
id al-Shar¯ı‘ah in a better manner and
accordingly get a higher index ranking. The stakeholders of the
Islamic banking would prefer to have the industry evaluated as per
maq¯as.
id al-Shar¯ı‘ah. This study has directly related the Islamic
banking services with the objectives of Shar¯ı‘ah and provided a
measurable index for the Islamic banking industry. The suggested
index can be used mainly by the regulatory bodies. Future studies
may focus more on the aspect and level of Shar¯ı‘ah compliance
of the products and services offered by various banks with a dual
objective to encourage the banks to raise their Shar¯ı‘ah compliance
level and rating, and also guide the stakeholders in the selection of
the banks.
Sajjad Zaheer, Warda Rasool. (2017) Maq¯as. id al-Shar¯ı‘ah Index for Islamic Banking Institutions, Journal of Islamic Business and Management, Volume 7, Issue 1.
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