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A conceptual framework for the Impact of financial crime towards the financial performance of Islamic financial institutions

Redzuan, Nur Harena and Abdul Rahman, Nur Hasnida and Abdullah, Adam (2019) A conceptual framework for the Impact of financial crime towards the financial performance of Islamic financial institutions. Al-Shajarah, Special Issue, Islamic Banking & Finance, Special Issue: Islamic Banking and Finance. pp. 23-41. ISSN 1394-6870

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Abstract

This paper aims to assess the reputation of risk faced by Islamic financial institutions due to financial crime activities. There is an increasing trend in financial crime activities at banking institutions. For Islamic financial institutions that are founded based on Sharīʽah, the usage of Islamic financial instruments for criminal activities undermines the integrity of the Islamic financial system itself. It would also tarnish Islamic financial institutions’ reputation that supposed to operate with Islamic principles against any criminal activities. Trust or the public confidence towards the integrity of Islamic financial institutions would also be distracted as being associated with financial crime activities signaling that the Islamic financial institutions' profit is eroded by criminal activities. This has raised concerns and questions about the reputation of Islamic financial institutions. A proposed conceptual framework discusses how trust and reputation risk affect the Islamic financial institutions’ performance when the financial crimes happen.

Item Type: Article (Journal)
Additional Information: 8441/76516
Uncontrolled Keywords: Financial Crime, Reputation Risk, Trust, Islamic Financial Institutions, Social Finance
Subjects: H Social Sciences > HG Finance > HG3368 Islamic Banking and Finance
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button): Institute of Islamic Banking & Finance (IIiBF)
Depositing User: Nur Harena Redzuan
Date Deposited: 05 Dec 2019 15:45
Last Modified: 21 Feb 2020 10:29
URI: http://irep.iium.edu.my/id/eprint/76518

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