Effect of Shariah board attributes on the financial soundness: evidence from Islamic banks
Abstract/Description
Purpose: The aim of this study is to investigate the association between Islamic bank’s financial soundness and its shariah board. Also, this study examines the effect of shariah board and its attributes on the Islamic bank’s financial soundness.
Design/methodology/approach: For the methodology, the financial soundness of bank would be individually evaluated by the z-score indicator. Panel data set of 51 Islamic bank, covering 7 Islamic countries during the period of 2015-2020 is used. Findings: The model shows that size of the board has a significant effect on the Islamic bank’s financial soundness. On the other hand, presence of mufti and a qualified shariah member have no effect on the Islamic bank’s financial soundness.
Originality/value: This study fits the best in shedding light on the literature on Islamic banking by explaining the association between the financial soundness and shariah board of Islamic bank. Methodologically, this study used new measure to assess the effect of shariah board’s chairman with knowledge or degree in shariah on Islamic bank’s financial soundness.
Practical implications: This research serves the best to fulfil the disparities in literature that discussed the shariah board’s characteristics on the Islamic bank’s performance. Also. This study contributes to the practical implications to the shariah board in the Islamic bank and help them in calling for enough scholars accordingly.
Social implications: This study ensures the functional and convenient evidence for different professions i.e., regulators, banking authorities, academics in making the policies for Islamic banks.
Keywords
Islamic bank, Shariah Board, Financial soundness, Panel data
Track
Accounting, Law, and Finance
Session Number/Theme
Session 1A: Islamic Finance
Session Chair
Dr. Irum Saba, Institute of Business Administration, Karachi
Session Discussant
Dr. Mohsin Zahid Khawaja; Dr. Mohsin Sadaqat; Madeeha Omer Lakhani; Nader Virk
Start Date/Time
23-6-2022 12:20 PM
End Date/Time
23-6-2022 12:40 PM
Location
Training Room 3, Marriott Hotel, Karachi
Recommended Citation
Waseem, F., Shahid, Z., & Abbas, S. (2022). Effect of Shariah board attributes on the financial soundness: evidence from Islamic banks. 3rd IBA SBS International Conference 2024. Retrieved from https://ir.iba.edu.pk/sbsic/2022/program/5
COinS
Effect of Shariah board attributes on the financial soundness: evidence from Islamic banks
Training Room 3, Marriott Hotel, Karachi
Purpose: The aim of this study is to investigate the association between Islamic bank’s financial soundness and its shariah board. Also, this study examines the effect of shariah board and its attributes on the Islamic bank’s financial soundness.
Design/methodology/approach: For the methodology, the financial soundness of bank would be individually evaluated by the z-score indicator. Panel data set of 51 Islamic bank, covering 7 Islamic countries during the period of 2015-2020 is used. Findings: The model shows that size of the board has a significant effect on the Islamic bank’s financial soundness. On the other hand, presence of mufti and a qualified shariah member have no effect on the Islamic bank’s financial soundness.
Originality/value: This study fits the best in shedding light on the literature on Islamic banking by explaining the association between the financial soundness and shariah board of Islamic bank. Methodologically, this study used new measure to assess the effect of shariah board’s chairman with knowledge or degree in shariah on Islamic bank’s financial soundness.
Practical implications: This research serves the best to fulfil the disparities in literature that discussed the shariah board’s characteristics on the Islamic bank’s performance. Also. This study contributes to the practical implications to the shariah board in the Islamic bank and help them in calling for enough scholars accordingly.
Social implications: This study ensures the functional and convenient evidence for different professions i.e., regulators, banking authorities, academics in making the policies for Islamic banks.
