The impact of shariah board on the performance of Islamic banks and the relevance of shariah committee (BNM) new ruling on the restructuring of Islamic financing facility during the pandemic crisis

Haron, Razali and Radzali, Nur Ermiedza and Nomran, Naji (2021) The impact of shariah board on the performance of Islamic banks and the relevance of shariah committee (BNM) new ruling on the restructuring of Islamic financing facility during the pandemic crisis. Turkish Journal of Islamic Economics, 8. pp. 423-443. ISSN 2147-9054 E-ISSN 2148-3809

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Abstract

This study examines the impact of Shariah Board (SB) characteristics on the financial and social performance of Islamic banks (IBs) from the perspectives of Agency Theory (AT), Stewardship Theory (ST) and the Resource Dependence Theory (RDT). To meet its objective, GMM is employed on a panel data of 15 IBs in Malaysia from 2010 to 2018 covering the pre and post implementation of IFSA 2013 with three performance measurements; ROA and ROE (financial performance) and Zakat over Asset (social performance). SB education, SB reputation, and SB expertise are positively related to IBs performance; while SB remuneration and SB cross membership are negatively related to performance. SB size is found to be insignificant. The study therefore concludes SB is relevant to the performance of IBs. The study also discusses the response of SB at the central bank (SAC-BNM) via its new ruling on financing restructuring in alleviating the hardship of IBs’ customers during the pandemic crisis.

Item Type:	Article (Journal)
Additional Information:	4581/90132
Uncontrolled Keywords:	Shariah Governance, Islamic Banks, Shariah Board, Pandemic, Performance.
Subjects:	H Social Sciences > HG Finance > HG1501 Banking
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:	08 Jul 2021 22:23
Last Modified:	14 Dec 2021 15:21
URI:	http://irep.iium.edu.my/id/eprint/90132

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