ETHICAL DIMENSIONS OF ISLAMIC FINANCE AND THEIR RELEVANCE IN CONTEMPORARY BUSINESS PRACTICES
Keywords:
Islamic Finance, Shariah Law, Ethical Considerations, Risk-Sharing, Social Responsibility.
Abstract
In the vast tapestry of global financial systems, Islamic finance emerges as a paragon of ethical praxis, steeped in the venerable tenets of Shariah law. The essence of this research is the exploration of these profound ethical underpinnings and their resonance in the contemporary mercantile milieu. The study takes a deep dive into the historical evolution of Islamic finance to highlight its core values of fairness, societal stewardship, and sustainable growth. These values make it a compelling alternative to the criticisms often levelled at conventional monetary systems. This research methodology adopts a systematic literature review approach, sourcing information from peer-reviewed articles, books, conference papers, and reports from recognised financial bodies. The culmination of this endeavour reveals an intricate interplay between the time-honoured ethics of Islamic finance and its manifestation in the modern economic realm. The introduction suggests that Islamic finance offers moral rectitude by championing risk-sharing and avoiding interest-driven transactions in today's globalised commerce.
JEL Classification Codes: G21, G20, Z12, P51, D63.
References
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Shamsudheen, S., & Rosly, S. (2020). Measuring ethical judgement on ethical choice in an ethical system: a confirmatory study on Islamic banks in UAE. International Journal of Islamic and Middle Eastern Finance and Management, 14(2), 301-316. https://doi.org/10.1108/imefm-03-2018-0112
Shamsudheen, S., Rosly, S., & Muneeza, A. (2023). Assessing ethical praxis of ethical (Islamic) financial institutions: a survey of empirical discoveries. International Journal of Law and Management, 65(5), 440-460. https://doi.org/10.1108/ijlma-11-2022-0256
Ullah, S., Harwood, I., & Jamali, D. (2016). ‘Fatwa repositioning’: The hidden struggle for sharia compliance within Islamic financial institutions. Journal of Business Ethics, 149(4), 895–917. https://doi.org/10.1007/s10551-016-3072-7
Uluyol, B., Secinaro, S., Calandra, D., & Lanzalonga, F. (2021). Mapping waqf research: a thirty-year bibliometric analysis. Journal of Islamic Accounting and Business Research, 12(5), 748-767. https://doi.org/10.1108/JIABR-07-2020-0149
Udoh, I. S., Joseph, U. E., & Awah, A. (2022). SERVICE EXPERIENCE AND PASSENGERS PATRONAGE OF TRANSIT COMPANIES IN THE SOUTH-SOUTH REGION OF NIGERIA. Studies, 5(2), 37-52. https://doi.org/10.52589/bjmms-54lan3ee
Zauro, N., Saad, R., & Sawandi, N. (2020). Enhancing socio-economic justice and financial inclusion in Nigeria. Journal of Islamic Accounting and Business Research, 11(3), 555-572. https://doi.org/10.1108/JIABR-01-2020-0006
Aribi, Z. A., & Arun, T. (2015). Corporate social responsibility and Islamic financial institutions (IFIs): Management perceptions from IFIs in Bahrain. Journal of Business Ethics, 129, 785-794. https://doi.org/10.1007/s10551-014-2132-9
Arham, M. (2010). Islamic perspectives on marketing. Journal of Islamic Marketing, 1(2), 149-164. https://doi.org/10.1108/17590831011055888
Beekun, R.I., Badawi, J.A. (2005). Balancing Ethical Responsibility among Multiple Organizational Stakeholders: The Islamic Perspective. J Bus Ethics 60, 131–145. https://doi.org/10.1007/s10551-004-8204-5
Bassens, D., Engelen, E., Derudder, B., & Wit lox, F. (2012). Securitisation across borders: organisational mimicry in Islamic finance. Journal of Economic Geography, 13(1), 85-106. https://doi.org/10.1093/jeg/lbr036
Belal, A., Abdelsalam, O., & Nizamee, S. (2014). Ethical reporting in Islamic Bank Bangladesh Limited (1983–2010). Journal of Business Ethics, 129(4), 769-784. https://doi.org/10.1007/s10551-014-2122-2
Bennett, M., & Iqbal, Z. (2013). How socially responsible investing can help bridge the gap between Islamic and conventional financial markets. International Journal of Islamic and Middle Eastern Finance and Management, 6(3), 211-225. https://doi.org/10.1108/imefm-aug-2012-0078
Budiman, M. (2015). Islamic finance: a practical guide. Journal of Islamic Business and Management, 5(1), 1-6. https://doi.org/10.12816/0027409
Chazi, A., & Syed, L. (2010). Risk exposure during the global financial crisis: the case of Islamic banks. International Journal of Islamic and Middle Eastern Finance and Management, 3(4), 306–320. https://doi.org/10.1108/17538391011093232
Franzoni, S., & Alali, A. (2018). Principles of Islamic finance and principles of corporate social responsibility: What convergence? Sustainability, 10(3), 637. https://doi.org/10.3390/su10030637
Gilani, H. (2015). Exploring the ethical aspects of Islamic banking. International Journal of Islamic and Middle Eastern Finance and Management, 8(1), 85-98. https://doi.org/10.1108/imefm-09-2012-0087
Guizani, M. (2020). Testing the pecking order theory of capital structure: the case of Islamic financing modes. Future Business Journal, 6(1), 1-12. https://doi.org/10.1186/s43093-020-00042-9
Hasan, Z. (2016). From legalism to value-oriented Islamic finance practices. Human omics, 32(4), 437-458. https://doi.org/10.1108/h-07-2016-0052
Jatmiko, W., Iqbal, A., & Ebrahim, M. (2023). On the ethicality of Islamic banks’ business model. British Journal of Management. https://doi.org/10.1111/1467-8551.12703
Jouti, A. T. (2018). Islamic finance: financial inclusion or migration?. ISRA International Journal of Islamic Finance, 10(2), 277-288. https://doi.org/10.1108/IJIF-07-2018-0074
Khatib, S., Abdullah, D., Amosh, H., Bazhair, A., & Kabara, A. (2022). Shariah auditing: analysing the past to prepare for the future. Journal of Islamic Accounting and Business Research, 13(5), 791-818. https://doi.org/10.1108/JIABR-07-2021-0147
Lone, F., & Ahmad, S. (2017). Islamic finance: more expectations and less disappointment. Investment Management and Financial Innovations, 14(1), 134-141. https://doi.org/10.21511/imfi.14(1).2017.14
Mathkur, N. M. M. (2019). Business Ethics in Islamic Finance. Archives of Business Research, 7(2), 143–152. https://doi.org/10.14738/abr.72.6179
Mbengue, B. (2010). Islamic finance, law, economics, and practices. Journal of Islamic Law and Culture, 12(2), 183–185. https://doi.org/10.1108/14779961011050368
Minhat, M., & Dzolkarnaini, N. (2016). Islamic corporate financing: does it promote profit and loss sharing? Business Ethics a European Review, 25(4), 482-497. https://doi.org/10.1111/beer.12120
Musa, M., Sukor, M., Ismail, M., & Elias, M. (2020). Islamic business ethics and practices of Islamic banks. Journal of Islamic Accounting and Business Research, 11(5), 1009-1031. https://doi.org/10.1108/jiabr-07-2016-0080
Miah, M., & Sharmeen, K. (2015). Relationship between capital, risk and efficiency. International Journal of Islamic and Middle Eastern Finance and Management, 8(2), 203-221. https://doi.org/10.1108/IMEFM-01-2014-0002
Rafikov, I., & Akhmetova, E. (2020). Methodology of integrated knowledge in Islamic economics and finance: collective ijtihad. ISRA International Journal of Islamic Finance, 12(1), 115-129. https://doi.org/10.1108/ijif-02-2019-0034
Sairally, B. (2013). Evaluating the corporate social performance of Islamic financial institutions: an empirical study. International Journal of Islamic and Middle Eastern Finance and Management, 6(3), 238-260. https://doi.org/10.1108/IMEFM-12-2012-0094
Shamsudheen, S., & Rosly, S. (2020). Measuring ethical judgement on ethical choice in an ethical system: a confirmatory study on Islamic banks in UAE. International Journal of Islamic and Middle Eastern Finance and Management, 14(2), 301-316. https://doi.org/10.1108/imefm-03-2018-0112
Shamsudheen, S., Rosly, S., & Muneeza, A. (2023). Assessing ethical praxis of ethical (Islamic) financial institutions: a survey of empirical discoveries. International Journal of Law and Management, 65(5), 440-460. https://doi.org/10.1108/ijlma-11-2022-0256
Ullah, S., Harwood, I., & Jamali, D. (2016). ‘Fatwa repositioning’: The hidden struggle for sharia compliance within Islamic financial institutions. Journal of Business Ethics, 149(4), 895–917. https://doi.org/10.1007/s10551-016-3072-7
Uluyol, B., Secinaro, S., Calandra, D., & Lanzalonga, F. (2021). Mapping waqf research: a thirty-year bibliometric analysis. Journal of Islamic Accounting and Business Research, 12(5), 748-767. https://doi.org/10.1108/JIABR-07-2020-0149
Udoh, I. S., Joseph, U. E., & Awah, A. (2022). SERVICE EXPERIENCE AND PASSENGERS PATRONAGE OF TRANSIT COMPANIES IN THE SOUTH-SOUTH REGION OF NIGERIA. Studies, 5(2), 37-52. https://doi.org/10.52589/bjmms-54lan3ee
Zauro, N., Saad, R., & Sawandi, N. (2020). Enhancing socio-economic justice and financial inclusion in Nigeria. Journal of Islamic Accounting and Business Research, 11(3), 555-572. https://doi.org/10.1108/JIABR-01-2020-0006
Published
2023-11-23
How to Cite
Baloch, B. A., & Chimenya, A. (2023). ETHICAL DIMENSIONS OF ISLAMIC FINANCE AND THEIR RELEVANCE IN CONTEMPORARY BUSINESS PRACTICES. International Journal of Islamic Banking and Finance Research, 11(2), 32-39. https://doi.org/10.46281/ijibfr.v11i2.2125
Section
Research Paper/Theoretical Paper/Review Paper/Short Communication Paper
Copyright (c) 2023 Babruk Aijaz Baloch, Andrew Chimenya
This work is licensed under a Creative Commons Attribution 4.0 International License.
