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Purpose This study aims to determine how Basel III capital requirements affect the stability of Islamic banks globally during the global financial crisis and the COVID-19 pandemic. Design/methodology/approach The secondary data for all Islamic banks worldwide from 2004 to 2021 is obtained from the FitchConnect database. The main technique was a two-step generalized method of moment (GMM) system, and the data were tested using pooled ordinary least squares, fixed effects and difference GMM models for robustness checks. Findings Regression results support the moral hazard hypothesis based on evidence that both the total capital ratio and the Tier 1 capital ratio have a statistically significant positive impact on the stability of Islamic banks globally. Furthermore, neither the global financial crisis of 2008–2009 nor COVID-19 (2020–2021) significantly impacted the stability of Islamic banks worldwide. The results are robust across alternative measures of stability, capital buffers, dummy variables and estimation techniques. According to the descriptive statistics, the number of Islamic banks that disclose their regulatory capital ratios to the public has increased over the study period, and the mean of total capital and Tier 1 ratios are considerably greater than what is required by Basel II and Basel III. Research limitations/implications Bankers, regulators and policymakers should benefit from the evidence on capital and risk management in Islamic banking according to Basel Committee on Banking Supervision (BCBS) and Islamic financial services board (IFSB) international standards in various jurisdictions. Originality/value This research builds on earlier studies that were both beneficial and instructive by exploring the relationship between BCBS and IFSB capital guidelines and the trustworthiness of Islamic banks in greater depth. This study uses numerous capital ratios, buffers and stability measures to provide an international context for research on Islamic banking. In addition, the database is up-to-date to include information about the COVID-19 pandemic aftereffects in the year 2021. This study also introduces the Basel membership of Islamic banks to provide context for countries still at the Basel II stage or are yet to begin implementing the Basel III international standard.

Purpose This paper focuses on the different Shari’ah resolutions on preference shares. This study aims to provide a systematic review to cover all authentic, peer-reviewed literature on this issue between the years 2001 and 2020. Design/methodology/approach This library research combines, compares and contrasts the discussions and the results of all these papers besides the opinions and discussions of some renowned scholars in the field. Findings The aim of this paper was met as every research during that period was included and scrutinized which resulted in a comprehensive knowledge about the presence shares. Research limitations/implications One of the limitations was the limited research on the Shari’ah issues in preference shares as a regulatory capital that meets Basel III accords. Originality/value This paper will be the reference for any researcher who wants to add value on this issue and to start from where researchers ended.

PurposeThe purpose of this study is to provide a critical review on how the Khazanah’s Sukuk Ihsan was structured in compliance with the requirements for issuance of Sustainable and Responsible Investment (SRI) sukuk set by the Securities Commission (SC) Malaysia. Design/methodology/approachTo explain the structures and features of the Sukuk Ihsan, this study extracted important information from the sukuk’s Principle Terms and Conditions and Information Memorandum and presented them in a simple and easy-to-understand way. Next, this study refers to Part D: Requirement for Issuance, Offering or Invitation to Subscribe or Purchase Sustainable and Responsible Investment Sukuk of the SC’s Guidelines on Sukuk (revised edition: 28 August 2014) to assess the compliance of the sukuk in terms of eligibility of SRI sukuk issuer and SRI projects, use of proceeds, reporting and disclosure and independent assessment on SRI programmes. In addition, this study then compares the requirements stated in the SC’s SRI Sukuk Framework with the International Capital Market Association’s Green Bond Principles (GBP) and the USA’s Social Impact Bond (SIB) Act 2014. FindingsThe present study finds that the definition of eligible SRI sukuk issuer in the Guidelines on Sukuk seems to be more stringent compared to the one provided in the GBP and the US’ SIB Act. Nevertheless, the SRI Sukuk Framework provides a more comprehensive yet precise list of eligible SRI projects, covering both environmental and social aspects, compared to the GBP (which only focuses on broad categories of environmental projects) and also the USA’s SIB Act (explicitly outlines 13 social projects which are aligned with the US Federal Government’s agenda in tackling social illnesses). Indeed, the main difference between the eligible SRI sukuk projects and its conventional counterparts lies in its compliance to Shariah principles. It is also observed that a significant emphasis has been given on SRI legislations in ensuring proper reporting and disclosure provided to the SRI sukuk stakeholders together with critical evaluation on the impacts of SRI programmes provided by an independent assessor. Practical implicationsThis paper contributes towards enriching the literature on the Islamic capital market, particularly on the integration between sukuk and social impacts investing. This paper was intended to highlight the important requirements in issuing SRI sukuk to various stakeholders of the Islamic capital market. Originality/valueThe authors hope to shed some lights on the unique features and structural applications of SRI sukuk and its importance in becoming an effective instrument to raise funds for social agenda of a country by providing a real and practical example.

PurposeThis paper aims to present the viability of unit trust waqf (Islamic endowment) as an alternative asset class for waqf creation.Design/methodology/approachThis paper starts with the conceptual exploration of the literature in the areas of waqf. The sources of the literature cover authentic sources of the Qurʾān and ḥadīth, as well as secondary sources such as books, journal articles and online resources.FindingsThis paper provides the conceptual framework of five models of unit trust waqf and their investment management parameters.Originality/valueThe novelty of this paper lies in its attempt to highlight the importance of waqf investment strategy in ensuring sustainable returns for waqf. It does so by introducing the conceptual models of unit trust waqf as viable mechanisms to pool more cash waqf from individual investors. The sustainability of the capital waqf assets in the form of unit trusts is maintained through the parameters for its application proposed towards the end of the paper.

PurposeThis paper aims to examine the current practice in Singapore regarding an inheritance issue: disposal of the residual net estate to the bayt al-māl, which is identified as the Islamic Religious Council of Singapore (Majlis Ugama Islam Singapura, MUIS). The issue arises when the deceased leaves farḍ (fixed-share) heir(s) and/or dhawū al-arḥām (outer family members) but there is no ʿaṣabah (agnatic residuary heir by blood). Farḍ legal heirs are those beneficiaries for whom the Qurʾān prescribes inheritance of a pre-determined share. Disposal of the residual net estate to the bayt al-māl results in a reduction in the share due to the farḍ legal heir or worse, a total loss to the dhawū al-arḥām legal heirs.Design/methodology/approachA qualitative approach based on library and case study research has been adopted to elaborate practices that fall under the purview of the Administration of Muslim Law Acts (AMLA), Chapter 3.FindingsThe current practice seems biased against, especially, women and spouses. It creates high dissatisfaction in the community, especially those affected by such practices. This paper elaborates on the practice of residual net estate distribution in Singapore and the contemporary practices of the four Sunni madh-habs – the Ḥanafī, Mālikī, Shāfiʿī and Ḥanbalī jurisprudential schools – in other countries.Research limitations/implicationsIn Singapore, Muslim law is defined and implemented by the civil court, not the Syariah Court or MUIS. The recommendation to change from the current classical practice by the Syariah Court and MUIS to the contemporary practice that is relevant to today’s context lies with the civil court and Government of Singapore. The choice for the Syariah Court and MUIS to adopt the contemporary practice as per Ḥanafī School by rule of the court or the government is beyond this research. Zayd ibn Thābit, Caliph Abū Bakr and a small number of companions held the view that the residue net estate asset must go to the bayt al-māl, the current classical practice. The contemporary practice adopted by Sayyidina ʿUthmān ibn ʿAffān, Jābir ibn Zayd and majority of the companions’ view, is not in favour of the residue net estate asset to go to the bayt al-māl; rather they view that it must be returned to the legal heirs.Practical implicationsAwareness in the community in the current controversial practice in Singapore when the residue net estate through the farāʾiḍ law was giving to bayt al-māl instead of returning to farḍ or dhawū al-arḥām in the absence of the ʿaṣabah legal heir as stated in the Inheritance Certificate issued by Syariah Court.Social implicationsTo understand the contemporary Muslim law and the practical and just application in today’s Singapore context as supported by the AMLA, Chapter 3.Originality/valueThis is the first study that challenges the current practice by the Syariah Court and MUIS in Singapore, thereby endeavouring to restore justice to the community.

PurposeThe purpose of this study is to propose a contemporary human resource management (HRM) framework by zakat institutions, which collect and manage religious alms, both obligatory (zakat) and voluntary (ṣadaqah), in Malaysia.Design/methodology/approachIn doing so, discussions pertaining to the key elements of zakat institutions’ HRM including recruitment, selection, performance appraisal, training and development and compensation are gathered from the existing literature and other sources of information such as zakat institutions’ websites and publications. In addition, zakat officers’ insight on how HRM is practiced at their institutions is gathered through a series of semi-structured interviews and incorporated in the findings of this study.FindingsThe paper finds that the state government, by virtue of the State Islamic Religious Council (SIRC), which is the sole trustee of all waqf properties in Malaysia, may have significant influence in formulating the human resource strategies and policies in zakat institutions.Research limitations/implicationsThe proposed HRM model can be a useful reference for SIRC in enhancing the current human resource practice in its respective zakat institutions.Originality/valueThe novelty of this study lies in the proposed HRM model applicable to zakat institutions. The model emphasizes the alignment between the zakat institutions’ HRM practice and their zakat collection and distribution goals, as well as zakat management objectives in general.

The purpose of this paper is to discuss the issues and challenges of liquidity risk management in Islamic banks. At the same time, the authors are going to identify the sources of liquidity risk in Islamic banks and the common instruments used to mitigate liquidity mismatches in both sides of their balance sheets. The study is a qualitative study that uses secondary sources of data to describe and analyze risk mitigation in the Islamic banking context. Data were collected from libraries by referring to books, journals from both online and offline sources. The research objectives were addressed by critically analysing various issues from both the Islamic principles and contemporary applications. The authors found that Islamic liquidity management is an important building block for stable and efficient banking. Even though there are several attempts, for example, i) organized tawarruq (commodity murabahah), ii) salam sukuk and iii) short-term ijarah sukuk, to find solutions to the incessant problems of liquidity faced by majority of Islamic banks, there are still several underlying problems such as i) in terms of deficiency in infrastructure especially in countries where Islamic finance is still at an early stage, ii) lack of hedging instruments and iii) Shariah restrictions on some instruments. Regulatory bodies should come up with more innovative practices of Islamic liquidity management to solve unresolved theoretical issues and also meeting market requirements for liquidity.

The jurisprudence of al-Ma'ālāt is an ancient jurisprudence rooted in Islamic law, and it is concerned with analyzing and taking into consideration the consequences and results people's actions can generate. The Fiqh was used by the Prophet and Sahaba, and it, thereafter, became so famous during the period of Imam Abu Hanifah, the founder of the Hanafi School of Jurisprudence. Fiqh of al-Ma'alat is a great distinctive feature and one of the important jurisprudential aspects of the Hanafi School. The school makes copious use and reference to the theory and practices of al-Ma'ālāt. Where the Hanafi school uses the term \"Ariat i.e., have you pondered if that happened\" and then builds the fatwa ruling based on this future event and also on the expected results of this event. History also mentions Al-Shaṭibī's attempts to draw the attention of the imams of his time to the importance of this jurisprudence through his book Al Muwafaqāt. But despite all the attempts, the writings on it are still few compared to Maqasid Al shariah, and the writings in it in Islamic economics and finance in the English language are almost non-existent, as there is only one source in English according to the researcher's knowledge. Unusually however, this important discipline was not given adequate attention especially by later scholars. Despite its significance. The reasons behind that, as the researcher think due to it is not easy to discover and need deep knowledge and interdisciplinary approach which not easy for each imam to discover or can do it. This article is an attempt to restore interest in it by looking at it through several Islamic, economic and administrative aspects, but to start with this jurisprudence to \"gain an understanding of the existing research and debates relevant to a particular topic or area of study, and to present that knowledge in the form of a written report. You will also gain insight into how researchers apply the concepts you are learning in your unit to real world problems.

The primary objective of this paper is to explore the potential of Islamic Real Estate Investment Trusts (I-REITs) as an effective instrument for financing waqf development activities. This study employs legal research methodology, (the data used were largely library-based and documentary in nature), in which opinions of jurists, classical and contemporary are analysed in discussing the potential of I-REITs as a mechanism to develop waqf assets. Besides, several resolutions issued by relevant market authorities are referred to in this study. The study concludes that despite several challenges, with proper implementation, I-REITs may be adopted by a waqf institution as a mechanism to finance the development of their waqf assets. The novelty of this paper lies in the proposed structure of I-REITs, which can be a useful reference for the policy-makers and REITs issuers in establishing an enabling environment within which waqf I-REITs can potentially operate. Therefore, this study hopes to shed some light on the potential of waqf I-REIT to become an asset class to provide diversity for the public to give waqf.

In both Islamic and conventional finance, SPVs (Special Purpose Vehicles) are a crucial part of securitisation. In an Islamic mode of securitisation, the SPV is accountable to facilitate the management of Sukuk, holding the title of the underlying asset, serving as a bankruptcy remote, and facilitating the cash flow for the investors. While Sukuk agreements are primarily regulated by English law, Sukuk's Shari’ah framework and underlying contract are governed under the jurisdiction of the local laws where Sukuk assets are located. Given this background, the study aims to examine the enforceability of foreign judgements and SPV framework of Saudi Arabia, Bahrain, and UAE, and afterward qualitatively analyse to determine the best practices from jurisdictions such as the United Kingdom, the United States of America, Malaysia, the Cayman Islands, and Turkey which can be incorporated in the selected jurisdictions. In this essence, secondary data is obtained from multiple resources such as Sukuk laws and regulations as well as articles, books, websites, and academic writings. These materials are then compared and analysed using the content analysis method. Thus, the regulations with respect to SPV incorporation and enforceability of foreign judgment will be examined as the analysis of these aspects will assist the Islamic finance community to reform their SPV framework in ways that explicitly and efficiently ensure transparency and inclusively disclose the scope of the role and status of all parties involved in an SPV formation.