Title

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.

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

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Jun 23rd, 12:20 PM Jun 23rd, 12:40 PM

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.