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Exploring green banking performance of Islamic banks vs conventional banks in Bangladesh based on Maqasid Shariah framework

Julia, Taslima and Kassim, Salina (2019) Exploring green banking performance of Islamic banks vs conventional banks in Bangladesh based on Maqasid Shariah framework. Journal of Islamic Marketing. pp. 1-16. ISSN 1759-0833

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Purpose – Environmentaldegradationhasbeenidentifiedasoneofthemajorimpedimentsfordevelopment in Bangladesh. The World Health Organization has ranked Bangladesh fourth among the most polluted countries in the world. Faced with this challenge, the Government of Bangladesh introduced the Green Financing Policy and encouraged banks to participate in offering green financing as part of the efforts to promote environment-friendly economic activities for sustainable economic development. This study aims to examine the financial performance of selected commercial banks that offered green financing in Bangladesh in the period from 2012 to 2014. Design/methodology/approach – In achieving this objective, the paper has divided the various sections of green banking policy under Maqasid Shariah framework of Imam Al-Ghazali, which is preserving faith, life, intellect, posterity and wealth. After that, green performance is compared between five conventional banks and five Islamic banks, according to the secondary data gathered from the annual reports and sustainability reports, as well as verified based on interviews. Finally, based on quantitative and qualitative thematic analysis approach, it is identified which banks meet most of the Shariah objectives along with performingsustainably. Findings – The study finds that none of the banks fully meet the green/sustainable policy requirements; however,the Islamic banks are ahead in preserving faith, intellect and wealth circulation. Research limitations/implications – This research is mostly based on secondary data; banks’ nondisclosure of green data was an impediment to run in-depth and fair comparisons. However, to check the reliability and validity of secondary data, two heads of sustainable banking department from conventional bank and two from Islamic bank have been interviewed. Practical implications – Based on the findings, several recommendations are made on ways to expedite green financing,whichcanultimatelyenhancecontributionofIslamicbankstowardthesustainableeconomic growth of the country while fulfilling Maqasid Shariah. Social implications – Because the green banking policy aim is very much in line with Maqasid Shariah which is the aim of Islamic banks, Islamic banks can presumably contribute more to the sustainable economic growth of the country by aligning their entire operations with green policies. Originality/value – To the best of the authors’ knowledge, this study is perhaps the earliest initiative to compare Islamic and conventional banks’ green performances in Bangladesh.

Item Type: Article (Journal)
Additional Information: 4600/79472
Uncontrolled Keywords: Islamic banks, Conventional banks,Green performance, Green policy of Bangladesh
Subjects: H Social Sciences > HG Finance
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: Prof. Dr. Salina Kassim
Date Deposited: 09 Mar 2020 16:14
Last Modified: 12 Sep 2020 20:00
URI: http://irep.iium.edu.my/id/eprint/79472

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