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Zakat and the performance of Islamic banks. Empirical evidence

Haron, Razali and Mohamed Barre, Galad and Abdullah Othman, Anwar Hasan (2021) Zakat and the performance of Islamic banks. Empirical evidence. In: Handbook of research on Islamic social finance and economic recovery after a global health crisis. IGI Global, Pennsylvania, United States, pp. 1-18. ISBN 9781799868118 (In Press)

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The objective of this study is to examine the performance of Islamic banks (IBs) in Malaysia based on zakat (ZOA and ZOE) and ROA and ROE. This is to effectively understand the factors influencing the performance of IBs in Malaysia. The study employs a balanced panel of 15 IBs for the period 2009-2018 using the System-GMM. The study provides justifications why zakat is the appropriate measurement for IBs’ performance. The study concludes that zakat is an appropriate performance measurement to explain the performance of IBs. This is because zakat is able to explain and truly reflects the performance of IBs and as such, IBs should pay more zakat as they generate more profit. Zakat therefore has a role to contribute to Islamic social finance in the context of IBs. Furthermore, IBs have indispensable roles in supporting the economy of a country through their liquidity creation and risk transformation functions.

Item Type: Book Chapter
Additional Information: 4581/85193
Uncontrolled Keywords: Zakat, performance measurement, Islamic banks, Islamic social finance
Subjects: BPH Islamic Economics > BPH531 Zakat
H Social Sciences > HG Finance > HG3368 Islamic Banking and Finance
H Social Sciences > HJ Public Finance > HJ1438 Public Finance In Islam
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button): Institute of Islamic Banking & Finance (IIiBF)
Depositing User: Dr. Razali Haron
Date Deposited: 30 Nov 2020 16:59
Last Modified: 30 Nov 2020 16:59
URI: http://irep.iium.edu.my/id/eprint/85193

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