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The Performance Measures of Islamic Banking Based on the Maqasid Framework

Abdul Razak, Dzuljastri and Mohamed, Mustafa Omar and Md Taib, Fauziah (2008) The Performance Measures of Islamic Banking Based on the Maqasid Framework. In: IIUM International Accounting Conference IV (INTAC IV), 24-26 June, 2008, Marriot Putrajaya Hotel. (Unpublished)

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Abstract

It has been taken for granted that Islamic banking (IB) is only about avoiding riba. The objectives of Islamic banking have not been formally addressed. As such, the present conventional performance yardsticks being used by IB have focused largely on financial measures. Hence there is a need for developing other performance measures that would complement the financial objectives of IB. This paper therefore proposes the objectives of IB from the theory of Maqasid al-Shari’ah and, derives a model of IB performance measures based on these objectives. A behavioral approach operationalization method (Sekaran, 2000) is used to quantify the Maqasid into measurable IB performance indicators that are later used for testing on a sample of six Islamic banks. The banks are evaluated and ranked at three levels based on their: 1) performance ratios, 2) performance indicators and 3) the overall Maqasid Index. Key words: Maqasid al-Shari’ah, Operationalization,., Simple Additive Weighting (SAW) Maqasid Index.

Item Type: Conference or Workshop Item (Full Paper)
Additional Information: 4433/10121
Uncontrolled Keywords: Islamic banking, performance measures, maqasid
Subjects: H Social Sciences > HG Finance > HG1501 Banking
Kulliyyahs/Centres/Divisions/Institutes: Kulliyyah of Economics and Management Sciences > Department of Finance
Depositing User: Dr Dzuljastri Abdul Razak
Date Deposited: 14 Dec 2011 16:25
Last Modified: 14 Dec 2011 16:25
URI: http://irep.iium.edu.my/id/eprint/10121

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