Islamic Bank: A Bank of Ethics in Compliance with Corporate Social Responsibility
Abstract
Purpose: This paper aims to shed light on the issue's prospects, as ethics in Islamic banking may become another distinguishing factor when compared to its conventional counterpart. This comparative research will compare co-operative banks that emphasize ethical operations to Islamic banking in Pakistan. Although ethics in other countries' co-operative banks has become a new market segment and succeeded because it drew many new customers who wanted to engage in a morally sound investment, Islamic banks continue to concentrate only on sharia.
Design/Methodology/Approach: The qualitative method is used in this study by analyzing statutes, particularly Islamic jurisprudences, local and international protocols, conventions, and treaties
Findings: In this work, it shows that ethics has the potential to make Islamic banking a full-fledged financial system if it is used as one of Islam's three pillars.
Implications/Originality/Value: In the Islamic economy, Islamic banking is unquestionably at the forefront. Along with Faith (Aqidah) and Islamic Legal Jurisprudence (Sharia), Ethics (Akhlak), as in corporate social responsibility, is a core part of Islam that doesn't get as much attention as it should. An Islamic bank should primarily concentrate on sharia despite balancing those three pillars. In practice, a business with a high ethical standard must be profitable, legal, honest, and ethical while also considering long-term sustainability.
Downloads
Metrics
References
Alhammadi, S., Alotaibi, K. O., & Hakam, D. F. (2020). Analyzing Islamic banking ethical performance from Maqāṣid al-Sharī 'ah perspective: evidence from Indonesia. Journal of Sustainable Finance & Investment, 1-23. DOI: https://doi.org/10.1080/20430795.2020.1848179
Ali, N., & Khan, K. I. (2022a). Corporate social responsibility: A commercial law perspective. Global Legal Studies Review, 7(2), 26 - 35
Ali, N., & Khan, K. I. (2022b). Governing the corporation: Regulations in the era of scandals and globalization. Journal of Accounting and Finance in Emerging Economies, 8(1), 153-164. DOI: https://doi.org/10.26710/jafee.v8i1.2235
Alwi, Z., Parmitasari, R. D. A., & Syariati, A. (2021). An assessment on Islamic banking ethics through some salient points in the prophetic tradition. Heliyon, 7(5), e07103. DOI: https://doi.org/10.1016/j.heliyon.2021.e07103
Basheer, M. F., Hameed, W. U., Sabir, S. A., & Jehangir, M. S. (2019). Islamic business ethics and Islamic banks performance in Malaysia: Does sincerity matter. Hamdard Islamicus, 42(4), 217-224.
Branco, M. C., & Rodrigues, L. L. (2006). Corporate social responsibility and resource-based perspectives. Journal of Business Ethics, 69(2), 111-132. DOI: https://doi.org/10.1007/s10551-006-9071-z
Chapra, M. U. (1992). Islam and the economic challenge (No. 17). International Institute of Islamic Thought (IIIT).
Cowton, C. J., & Thompson, P. (2001). Financing the social economy: A case study of Triodos bank. International Journal of Nonprofit and Voluntary Sector Marketing, 6(2), 145-155. DOI: https://doi.org/10.1002/nvsm.142
El Hussein, N. H. A. (2018). The sharia supervisory board: does it influence corporate social responsibility disclosure by Islamic banks? A review. Journal of Islamic Studies and Culture, 6(1), 121-132. DOI: https://doi.org/10.15640/jisc.v6n1a13
Guthrie, J., & Mathews, M. R. (1985). Corporate social accounting in Australasia. In Research in corporate social performance and policy (pp. 251-277). JAI Press.
Jamali, D., & Mirshak, R. (2007). Corporate social responsibility (CSR): Theory and practice in a developing country context. Journal of Business Ethics, 72(3), 243-262. DOI: https://doi.org/10.1007/s10551-006-9168-4
John, A., Shahzadi, G., Khan, K. I., Chaudhry, S. & Bhatti, M. S. R. (2022). Charity begins at home: Understanding the role of CSR and HR practices on employees’ attitudes during COVID-19 in the Hospitality Sector, Frontiers in Psychology, 13, 828524. DOI: https://doi.org/10.3389/fpsyg.2022.828524
Khan, K. I., & Mushtaq, A. (2020). Corporate social responsibility and firms credibility: A comparative study of family and non-family firms; Evidence from Pakistan stock exchange, Review of Socio-Economic Perspectives, 5(2), 59-86.
Khan, M., Lockhart, J., & Bathurst, R. (2020). A multi-level institutional perspective of corporate social responsibility reporting: A mixed-method study. Journal of Cleaner Production, 265, 121739. DOI: https://doi.org/10.1016/j.jclepro.2020.121739
Mergaliyev, A., Asutay, M., Avdukic, A., & Karbhari, Y. (2021). Higher ethical objective (Maqasid al-Shari'ah) augmented framework for Islamic banks: Assessing ethical performance and exploring its determinants. Journal of Business Ethics, 170(4), 797-834. DOI: https://doi.org/10.1007/s10551-019-04331-4
Meslier, C., Risfandy, T., & Tarazi, A. (2020). Islamic banks' equity financing, Shariah supervisory board, and banking environments. Pacific-Basin Finance Journal, 62, 101354. DOI: https://doi.org/10.1016/j.pacfin.2020.101354
Narayan, P. K., & Phan, D. H. B. (2019). A survey of Islamic banking and finance literature: Issues, challenges and future directions. Pacific-Basin Finance Journal, 53, 484-496. DOI: https://doi.org/10.1016/j.pacfin.2017.06.006
Nawaz, T. (2019). Exploring the nexus between human capital, corporate governance and performance: Evidence from Islamic banks. Journal of Business Ethics, 157(2), 567-587. DOI: https://doi.org/10.1007/s10551-017-3694-0
Platonova, E., Asutay, M., Dixon, R., & Mohammad, S. (2018). The impact of corporate social responsibility disclosure on financial performance: Evidence from the GCC Islamic banking sector. Journal of Business Ethics, 151(2), 451-471. DOI: https://doi.org/10.1007/s10551-016-3229-0
Williams, G., & Zinkin, J. (2010). Islam and CSR: A study of the compatibility between the tenets of Islam and the UN Global Compact. Journal of Business Ethics, 91(4), 519-533. DOI: https://doi.org/10.1007/s10551-009-0097-x
Zafar, M. B., & Sulaiman, A. A. (2019). Corporate social responsibility and Islamic banks: A systematic literature review. Management Review Quarterly, 69(2), 159-206. DOI: https://doi.org/10.1007/s11301-018-0150-x
Zainuldin, M. H., & Lui, T. K. (2020). Earnings management in financial institutions: A comparative study of Islamic banks and conventional banks in emerging markets. Pacific-Basin Finance Journal, 62, 101044. DOI: https://doi.org/10.1016/j.pacfin.2018.07.005
Copyright (c) 2022 Naheeda Ali, Kanwal Iqbal Khan, Salman Naseer
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
CSRC Publishing and SBSEE adhere to Creative Commons Attribution-Non Commercial 4.0 International License. The authors submitting and publishing in SBSEE agree to the copyright policy under creative common license 4.0 (Attribution-Non Commercial 4.0 International). Under this license, the authors published in SBSEE retain the copyright including publishing rights of their scholarly work and agree to let others remix, tweak, and build upon their work non-commercially. All other authors using the content of SBSEE are required to cite author(s) and publisher in their work. CSRC Publishing and JAFEE follow an Open Access Policy for copyright and licensing.
