This paper is conducted to compare the determinants of profitability of the domestic and foreign Islamic banks operating in Malaysia. The Generalized Least Square (GLS) is employed with unbalanced panel data on seventeen Islamic banks, using quarterly data for the period of 2007 to 2010. In order to find out the differences in the profitability determinants, the sample of banks is divided into two sub-samples (domestic and foreign). The results reveal that domestic Islamic banks are more profitable than foreign Islamic banks. The results also show that the profitability determinants of domestic banks are different from those of foreign banks. The overhead expenses, loans, efficiency, gross domestic product growth rate and bank size have a significant effect in determining banks� profitability, in which case applicable to the domestic banks only. In turn, the gross domestic product per capita has a significant effect in determining banks� profitability of only the foreign banks. The study finds that, deposits, capital and reserves, inflation and banks� age have a significant effect in determining banks� profitability of both domestic and foreign banks. Meanwhile, liquidity and concentration are not able to explain the variability of domestic and foreign Islamic banks� profitability. The findings indicate that the profitability of domestic banks is affected by the global financial crisis while, the profitability of foreign banks is not affected. � 2012, Econjournals. All rights reserved.

Having been applied for over four decades, the Islamic finance industry faces a divergence of opinions on the Shar?ah, resulting from different interpretations adopted by Shar?ah scholars when modifying classical fiqh doctrines to suit the current banking system. Although juristic disagreement is acceptable from a fiqh perspective, its practice in the financial industry brings more disadvantages than benefits. Recently the call for harmonising Shar?ah rulings has become stronger. This article defines what is meant by harmonisation of Shar?ah in the context of the Islamic finance industry, and outlines its scope and contribution. The discussion is pertinent due to confusion over the term 'standardisation'. Contemporary Shar?ah scholars and practitioners in the financial industry appear to be in disagreement when elaborating upon the issue. Hence, it is hoped that this article will help clarify the meaning of 'harmonisation' and shed light on how this can be accomplished to benefit the financial industry. � 2016 Koninklijke Brill NV, Leiden, The Netherlands.

In a modern economy, there is no doubt that banks play a major role in generating the economic and financial growth. The individuals, the communities and the organizations are reliant on banks as their financial resources and necessities fulfillment. Their dependence to the banks has led them to engage a variety of contracts especially a debt-based contract. This contract required them to bond with the banks in the long period. Therefore, the various innovation products are designed to ensure the debtors are able to engage in an Islamic way and the banks are able to attain their income generation at the same time. While the debt contract is almost impossible to be implemented in Islamic banking system nowadays as it will lead to an interest, a modification process on the innovating sale contracts that have a commercial value for the bank is the only way for them to offer a debt-based contract to the people. Thus this paper attempts to explore the potential of ar-rahn product to solve the current problem. It tries to propose the enhancement of ar-rahn existing product offered by the bank and pawnshop as a good alternative to the financing products. The explored features of the potential of ar-rahn consist of the suitability of concepts adopted in the product, the possibility of longer repayment's period, the minimization of the shariah and economic issue of ujrah fee, the possibility of offering more than RM10, 000 borrowing money and the expansion of receivable pledge item. While the exploration of those features is discussed in a foundational and ideal basis, it is hoped to stimulate further investigation in the future.

The objective of this paper is to investigate the effect of bank specific characteristics and microeconomics variables on bank margin (NIM) which reflects the intermediary role of Islamic and conventional banks in Malaysia for the period of 2006 to 2014. By using static panel analysis, the results show that management efficiency is positively related to the bank margin for both Islamic and conventional banks. For Islamic banks, bank size and liquidity ratio have significant negative relationship on bank margin. The default risk is positively related to bank margin for Islamic banks. As for conventional bank, the non interest to total asset ratio has significant positive relationship on bank margin. Therefore, the results show that there are similarities and differences in terms of determinant factors that affect the bank margin between Islamic banks and conventional banks. These empirical results suggest an important policy on issues pertaining to how Islamic and conventional banks have to adjust the changes in the banking environment. The conventional banks have more comparative advantages specifically on management efficiency as its intermediary role performance is also not affected by size. 2018 Penerbit Universiti Kebangsaan Malaysia. All rights reserved.

The purpose of this research paper is to investigate the potential for introduction of Islamic banking services in Macedonia. Furthermore, it examines the level of knowledge and awareness on Islamic banking principles and instruments, and the demand and support for Islamic banking services among various banks� stakeholders in Macedonia. The study adopted a combination of quantitative and qualitative methods. 500 respondents participated in the survey of questionnaires and 16 experts including regulators, bankers, religious scholars and academician were interviewed. Descriptive statistics was used to analyze the questionnaires. Hence, the interpretative method was used to analyze the interviews. The findings indicate solid level of knowledge and awareness on Islamic banking principles and instruments among various banks� stakeholders. Also, there is a strong demand and support for Islamic banking services among various banks� stakeholders. Considering the gap found in literature, the need to conduct a research to investigate the need for Islamic banking service in Macedonia is highlighted. In the case of Macedonia, the study could be beneficial for investors and regulators who might think of introducing Islamic banking services in the country. � 2016, Econjournals. All rights reserved.

This paper investigates the quantitative and qualitative approaches of bank pricing determinants practised by the Islamic banking industry in Malaysia. On the quantitative approach, this paper investigates the effects of bank characteristics on bank profit margin, which reflects the intermediary role of Islamic and conventional banks in Malaysia for the period of 2006 to 2014. For Islamic banks, bank size and liquidity ratio have a significant negative relationship with bank profit margin. The management efficiency (vis-a-vis cost to income) and default risk are positively related to bank income margin for Islamic banks. As for conventional banks, besides management efficiency, the non-interest to total asset ratio has a significant positive influence on bank profit margin. Therefore, the results show that there are similarities and differences in terms of determinants of the Islamic and conventional banks. These empirical results suggest an important policy on issues pertaining to how Islamic and conventional banks have to adjust to the changes in the banking environment in terms of performance and its comparative advantages, specifically on management efficiency, as both Islamic and conventional banks' performance are affected by it. The management efficiency has more impact on the conventional banks than Islamic banks. For the qualitative approach, the key determinants and pricing approaches were extracted using the verbal protocol. The verbal protocol was followed by in-probing of respondents. Interviews were conducted with Islamic banking experts from Bank Muamalat Malaysia Berhad, CIMB Islamic Bank Berhad, Maybank Islamic Berhad, dan Bank Islam Malaysia Berhad. The analyses suggest some distinct outcomes and results in identifying the determinants and practices of pricing and bank margin for future research. This study provides important insights for Islamic banks to improve their bank margin and profit by considering the significant variables affecting their bank profit margin. Generally, the themes that emerged from the interviews are parallel with findings from the literature. However, the determinants of the pricing that have not been captured by the literature are marketing strategies, which include product risk and financing terms and conditions, and discretionary power. The awareness of Islamic banking products and cost of fund strategy are other important determinants of bank margin and profitability. This research also has the potential to enrich bank margin determinants' concept, theory, and practice.

Shariah Advisory Council (SAC) of Securities Commission (SC) formulated a new revised Shariah screening methodology of two-tier quantitative assessment for activity-based screening benchmarks and the newly- formulated financial ratio benchmarks, while the qualitative assessment remains the same. The revised methodology is an effort to expand the Islamic capital market's (ICM) international reach which is in line with the SC objectives. The objective of this paper is to examine the impact of the recent announcement of new changes in the Shariah screening methodology by the Malaysian Securities Commission on the share prices of the affected companies and Islamic capital market. We use an event study method to see if the changes have a significant reaction from the market, specifically, from investors and fund managers. On the announcement date, that is, on 29 November 2013, 158 non-Shariah compliant stocks were removed from the previous list of Shariah compliant stock that was issued in May 2013 and 16 stocks were added to the approved list. Out of 158 non-Shariah compliant stocks, only 137 stocks are available for the analysis. For the new Shariah compliant stocks, only 16 stocks are included in the sample. We find an immediate but short lived negative impact on the stock returns towards the deletion, but none towards the addition of new stocks to the Shariah index. However, the announcement has no significant impact on the overall return of the FBM Emas Shariah index.

The current practice of Islamic banking in Malaysia has been criticised as insufficiently different from conventional banking. One of the foci of this criticism is the application of bay' al-'inah, sales contract with immediate repurchase, in creating a number of so-called Islamic financing products. The present article examines the classical jurists' assessment of the contract and then evaluates the justifications of the Malaysian National Shari'ah Advisory Committee (NSAC). As a case study, this article analyses the application of bay' al-'inah in inventing a credit card of Bank Islam Malaysia Berhad. Understanding the NSAC's justifications will help us comprehend their methodology and approach when approving other Islamic banking products in the country. � Koninklijke Brill NV, Leiden, 2012.