IDEAS home Printed from https://ideas.repec.org/a/wly/buseth/v31y2022i1p257-271.html

Islamic financial services industry: Aspirations and achievements

Author

Listed:
  • Muhammad Hanif
  • Muhammad Ayub

Abstract

Islamic Financial Services Industry (IFSI) crosses the age of 40 years, and sufficient empirical evidence exists to evaluate in light of the distinctive aspirations. This study fills the gap in the literature by evaluating the performance of IFSI in light of Islamic finance objectives—financial stability, equitable distribution of wealth and social responsibility; Shari’ah principles, and professional practices. Our investigation documents the achievements based on real accounting data from 23 countries, and the suitability of tools in practice to achieve the stated objectives by promotors of IFSI. Findings suggest that the objectives of IFSI have been achieved to an extent. However, visible contribution to the achievement of socio‐economic justice is yet to emerge. Practical application of tools shows divergence (in spirit) from the original design, primarily to achieve integration and coherence with the prevailing conventional financial system. IFSI needs collaborative efforts to overcome the challenges at hand.

Suggested Citation

  • Muhammad Hanif & Muhammad Ayub, 2022. "Islamic financial services industry: Aspirations and achievements," Business Ethics, the Environment & Responsibility, John Wiley & Sons, Ltd., vol. 31(1), pages 257-271, January.
    • Handle: RePEc:wly:buseth:v:31:y:2022:i:1:p:257-271
    DOI: 10.1111/beer.12406
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/beer.12406
    Download Restriction: no
    File URL: https://libkey.io/10.1111/beer.12406?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Zamir Iqbal & Hennie Van Greuning, 2008. "Risk Analysis for Islamic Banks," World Bank Publications - Books, The World Bank Group, number 6923, April.
    2. Muhammad Hanif, 2016. "Economic substance or legal form: an evaluation of Islamic finance practice," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 9(2), pages 277-295, June.
    3. Ulrich Derigs & Shehab Marzban, 2008. "Review and analysis of current Shariah‐compliant equity screening practices," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 1(4), pages 285-303, November.
    4. Edib Smolo & Abbas Mirakhor, 2010. "The global financial crisis and its implications for the Islamic financial industry," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 3(4), pages 372-385, November.
    5. Muhammad Hanif, 2016. "Economic substance or legal form: an evaluation of Islamic finance practice," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 9(2), pages 277-295, June.
    6. repec:osf:osfxxx:t5jeh_v1 is not listed on IDEAS
    7. Roszaini Haniffa & Mohammad Hudaib, 2007. "Exploring the Ethical Identity of Islamic Banks via Communication in Annual Reports," Journal of Business Ethics, Springer, vol. 76(1), pages 97-116, November.
    8. Ulrich Derigs & Shehab Marzban, 2008. "Review and analysis of current Shariah‐compliant equity screening practices," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 1(4), pages 285-303, November.
    9. Asyraf Wajdi Dusuki, 2008. "Understanding the objectives of Islamic banking: a survey of stakeholders' perspectives," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 1(2), pages 132-148, June.
    10. Hassan, M. Kabir & Aliyu, Sirajo, 2018. "A contemporary survey of islamic banking literature," Journal of Financial Stability, Elsevier, vol. 34(C), pages 12-43.
    11. Asyraf Wajdi Dusuki, 2008. "Understanding the objectives of Islamic banking: a survey of stakeholders' perspectives," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 1(2), pages 132-148, June.
    12. Edib Smolo & Abbas Mirakhor, 2010. "The global financial crisis and its implications for the Islamic financial industry," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 3(4), pages 372-385, November.
    13. Hanif, Muhammad & Zafar, Kiran, 2020. "Developments in Islamic Finance Literature: Evidence from Specialized Journals," OSF Preprints t5jeh, Center for Open Science.
    14. Edib Smolo & Abbas Mirakhor, 2010. "The global financial crisis and its implications for the Islamic financial industry," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 3(4), pages 372-385, November.
    15. Muhammad Hanif, 2019. "Islamic mortgages: principles and practice," International Journal of Emerging Markets, Emerald Group Publishing Limited, vol. 14(5), pages 967-987, August.
    16. Muhammad Hanif, 2016. "Economic substance or legal form: an evaluation of Islamic finance practice," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 9(2), pages 277-295, June.
    17. Asyraf Wajdi Dusuki, 2008. "Understanding the objectives of Islamic banking: a survey of stakeholders' perspectives," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 1(2), pages 132-148, June.
    18. Ulrich Derigs & Shehab Marzban, 2008. "Review and analysis of current Shariah‐compliant equity screening practices," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 1(4), pages 285-303, November.
    19. M. H. Khatkhatay & Shariq Nisar, 2007. "Shari[Ah Compliant Equity Investments: An Assessment Of Current Screening Norms," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 15, pages 48-76.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Muhammad Hanif, 2025. "Achievement of Islamic Finance Objectives: Evidence from the UAE Islamic Banking Industry," Risks, MDPI, vol. 13(5), pages 1-16, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:osf:osfxxx:e3pxd_v1 is not listed on IDEAS
    2. Iqbal, Hafiz Masood Ahmad & Ali, Amjad & Audi, Marc, 2025. "Balancing Compliance and Transparency: A Comparative Analysis of Takaful and Conventional Insurance in Pakistan," MPRA Paper 127315, University Library of Munich, Germany.
    3. Yunice Karina Tumewang & Taha Almarayeh & Esraa Alharasis, 2025. "Sustainability Committee, External Assurance, and ESG Performance: Empirical Evidence From Banking Industry in Emerging Economies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 32(2), pages 2728-2745, March.
    4. Hanif, Muhammad & Farooqi, M Nauman, 2023. "Objective Performance Evaluation of The Islamic Banking Services Industry: Evidence from Pakistan," OSF Preprints e3pxd, Center for Open Science.
    5. Muhammad Ali & Syed Ali Raza & Chin-Hong Puah & Muhammad Shujaat Mubarik, 2023. "Customer acceptance toward Islamic personal financing in Pakistan," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 28(2), pages 270-284, June.
    6. Edib Smolo & Rashed Jahangir & Ruslan Nagayev & Christo S. C. Tarazi, 2022. "Performances of Islamic and conventional equities during the global health crisis: Time‐frequency analysis of BRICS+T markets," Review of Financial Economics, John Wiley & Sons, vol. 40(3), pages 259-280, July.
    7. Achraf Haddad, 2023. "Impact of financial development initiatives on the banks’ financial performance: comparative study in the stakeholders’ theory framework," SN Business & Economics, Springer, vol. 3(1), pages 1-27, January.
    8. Bulut, Mehmet & Korkut, Cem, 2023. "Cash Waqf for An Ethical Business World," MPRA Paper 126578, University Library of Munich, Germany.
    9. Ashraf, Dawood & Rizwan, Muhammad Suhail & Raza, Muhammad Wajid, 2025. "Does compliance with screening standards affect the performance of firms?," Emerging Markets Review, Elsevier, vol. 65(C).
    10. Talat Ulussever & Ömer Tuğsal Doruk & Hasan Murat Ertuğrul & Ömer Faruk Tekdoğan, 2025. "Shariah-compliant firms and firm leverage: evidence from firm-level time varying quasi experimental analysis for MENA countries," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-9, December.
    11. Nasir Ababulgu Abasimel, 2023. "Islamic Banking and Economics: Concepts and Instruments, Features, Advantages, Differences from Conventional Banks, and Contributions to Economic Growth," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(2), pages 1923-1950, June.
    12. Abdelsalam, Omneya & Ahelegbey, Daniel Felix & Essanaani, Yassine, 2024. "The nexus of conventional, religious and ethical indexes during crisis," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 95(C).
    13. Mohd Ariff Mustafa & Jismi Md Salleh & Mohd Amran Mahat & Mohd Yassir Jaaffar, 2025. "Mapping the Intellectual Landscape of Management and Islamic Institutions: A Comprehensive Bibliometric Analysis (1977–2025)," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(9), pages 5864-5877, September.
    14. Mohd Rahim Khamis & Maryam Jameelah Mohd Hashim, 2025. "The Use of Rasch Wright Map in Assessing Conceptual Understanding of Islamic Economics," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(8), pages 5073-5081, August.
    15. Nurul Nadzirah Abdul Nasir & Surita Hartini Mat Hassan & Ramlan Mustapha & Mohd Kamal Azman Jusoh, 2024. "Awareness to Use Islamic Banking Products and Services among Non-Muslim Consumers in Malaysia: A Nominal Group Technique Approach," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(12), pages 2385-2395, December.
    16. Kaouther Toumi Lajimi & Rana El Bahsh & Serge Agbodjo, 2017. "The determinants of bank profitability, do Islamic ethics perspective matter ? A comprehensive study on Islamic banks vs. conventional ones," Post-Print hal-04109833, HAL.
    17. Norma Md Saad & Adamu Ahmed Wudil & Md Nazim Uddin & Yusof Bin Ismail, 2025. "Islamic Microfinance and Sustainable Development Goals (SDGs): Evidence from Bangladesh, Malaysia and Turkey," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(15), pages 1-14, January.
    18. Mega T.R. Luik & Ahlis Fatoni, 2018. "Revisiting Analysis Of The Root Causes On Financial Crisis In Islamic Perspective," Journal of Islamic Monetary Economics and Finance, Bank Indonesia, vol. 4(1), pages 39-60, August.
    19. Naseem Al Rahahleh & M. Ishaq Bhatti & Faridah Najuna Misman, 2019. "Developments in Risk Management in Islamic Finance: A Review," JRFM, MDPI, vol. 12(1), pages 1-22, February.
    20. Fatma Alahouel & Nadia Loukil, 2020. "Financial uncertainty valuation: doesShariahcompliant screening matter?," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 14(1), pages 57-76, August.
    21. Manu Abraham, 2024. "Shariah compliance and earnings management in India: Insights on reporting transparency and financial stability," Modern Finance, Modern Finance Institute, vol. 2(1), pages 145-165.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:buseth:v:31:y:2022:i:1:p:257-271. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://onlinelibrary.wiley.com/journal/26946424 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.