Md. Habibur Rahman, Md. Faruk Abdullah, Noor Mohammad Osmani and Nur Suhailah Zakiyyah Binti Aziz
This study aims to investigate the possibility of practicing cross-subsidisation of underwriting surplus among different takaful operators. It responds to the recent discussion…
Abstract
Purpose
This study aims to investigate the possibility of practicing cross-subsidisation of underwriting surplus among different takaful operators. It responds to the recent discussion paper published by Bank Negara Malaysia (BNM) on broader application of tàawun (mutual assistance), which seeks insights into cross-tàawun of underwriting surplus within takaful industry.
Design/methodology/approach
A qualitative, semi-structured interview is used to gather primary data, featuring 13 one-to-one interviews with selected Sharìah and operational experts in takaful. Open-ended questions are drafted according to BNM’s discussion paper to guide the interview. A content analysis method is used to delve into the topic based on scholarly papers, books and regulatory guidelines. A thematic analysis is applied to explore the qualitative data.
Findings
This study establishes the feasibility of cross-subsidisation of underwriting surplus in takaful. Given that participants are the rightful owners of the underwriting surplus, cross-tàawun is deemed permissible with participants’ consent. With the view that underwriting surplus belongs to the fund due to outright transfer of contributions by participants, the regulators have discretion to permit cross-tàawun. The authorities can make any decision if it serves the public interest. Furthermore, the study provides Sharìah and regulatory requirements to govern the practice of cross-tàawun in takaful. Respondents of the study advocate for policy reviews and regulatory adjustments to facilitate cross-subsidisation of takaful surplus.
Practical implications
This study significantly contributes to the existing body of knowledge in Islamic insurance studies. It offers valuable insights for the regulators to formulate the required policies and guides takaful operators to develop products accordingly. Moreover, the study supports Sharìah scholars in making informed decisions about cross-tàawun practices.
Originality/value
This study fills a critical gap in the existing literature by being the first to examine cross-subsidisation of underwriting surplus in takaful. The proposed cross-subsidisation of underwriting surplus will enhance sustainability of takaful funds and contribute to stability of takaful industry. As a foundation, this study encourages future research to explore other relevant aspects of cross-subsidisation of underwriting surplus in takaful operation.
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Ameen Ahmed Abdullah Qasem Al-Nahari, Abu Talib Mohammad Monawer, Luqman Bin Haji Abdullah, Abdul Karim Bin Ali, Noor Naemah Binti Abdul Rahman and Meguellati Achour
This paper aims to scrutinize the misconceptions about maqāṣid al-Sharīʿah (objectives of Islamic law) that complicate its actualization, particularly in Islamic finance.
Abstract
Purpose
This paper aims to scrutinize the misconceptions about maqāṣid al-Sharīʿah (objectives of Islamic law) that complicate its actualization, particularly in Islamic finance.
Design/methodology/approach
This study adopts a qualitative inductive method to identify the flaws in understanding maqāṣid al-Sharīʿah vis-à-vis Islamic finance. It uses the views of classical and modern maqāṣid scholars to critically examine the flaws.
Findings
This study concludes that the five objectives of the Sharīʿah constitute the framework of maṣlaḥah (well-being). The levels of maṣlaḥah ― namely ḍarūriyyāt (essentials), ḥājiyyāt (needs) and taḥsīniyyāt (embellishments) ― are the categories of the means to ends. The demand for financial products falls under the ḥājiyyāt and taḥsīniyyāt categories, not ḍarūriyyāt. The maqāṣid (objectives) are derived from aḥkām (provisions) being verified by the parameters, while aḥkām are guided by maqāṣid.
Research limitations/implications
This study recommends further research to theorize the concepts of ḍarūriyyāt, ḥājiyyāt, taḥsīniyyat and mukammilāt (complements); to harmonize the maqāṣid with their essential elements and to formulate a conceptual framework for actualizing maqāṣid al-Sharīʿah in Islamic finance.
Practical implications
This paper will improve perceptions and bridge gaps between the understanding of maqāṣid theory and existing practices. It suggests that instead of ḍarūriyyāt, Islamic financial institutions (IFIs) should refer to ḥājiyyāt and taḥsīniyyāt.
Originality/value
This paper identifies and clarifies the misconceptions about maqāṣid al-Sharīʿah vis-à-vis Islamic finance in the existing literature. The findings align with the views of leading maqāṣid scholars in understanding the idea.
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Abu Talib Mohammad Monawer, Noor Naemah Abdul Rahman, Ameen Ahmed Abdullah Qasem Al-Nahari, Luqman Haji Abdullah, Abdul Karim Ali and Achour Meguellati
This paper aims to formulate a conceptual framework that will facilitate the actualization of maqāṣid al-Sharīʿah in product design and consumption within Islamic financial…
Abstract
Purpose
This paper aims to formulate a conceptual framework that will facilitate the actualization of maqāṣid al-Sharīʿah in product design and consumption within Islamic financial institutions (IFIs).
Design/methodology/approach
This paper relies on the classical and contemporary literature on maqāṣid al-Sharīʿah and Islamic finance and adopts a qualitative content analysis method and an inductive approach to outline the constituent elements that formulate the framework.
Findings
This study determines six vital constituents of maqāṣid al-Sharīʿah, namely, parameters of maqāṣid, particular objectives, appropriate means, micro provisions, level of need and legal maxims to develop a conceptual framework of actualizing maqāṣid al-Sharīʿah in Islamic finance. The framework covers the following three stages: identification of maqāṣid, operationalization of maqāṣid in product design and consumption based on maqāṣid.
Research limitations/implications
This paper proposes a conceptual framework without investigating the practice of any particular industry or products. Further research would focus on formulating a practical framework based on a focus group discussion with industry experts, elaborating the parameters of maqāṣid, scrutinizing the maqāṣid available in the literature by the parameters of maqāṣid and assessing the IFIs’ products and services using the proposed framework.
Practical implications
This paper provides insights into the importance of maqāṣid elements and the effects of overlooking them on IFIs and customers’ product consumption. Furthermore, a major implication of the proposed framework is to learn how to use the maqāṣid approach as the baseline for designing new financial products.
Originality/value
The novelty of this paper lies in its pioneering attempt of harmonizing all essential maqāṣid elements and using them as constituents to formulate a comprehensive framework that actualizes maqāṣid al-Sharīʿah in the Islamic finance industry.
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Md. Mahmudul Alam, Chowdhury Shahed Akbar, Shawon Muhammad Shahriar and Mohammad Monzur Elahi
Because of chronic financial crises experienced during past several decades repeatedly and a failure to protect investors’ rights as a result, the world is looking for an…
Abstract
Purpose
Because of chronic financial crises experienced during past several decades repeatedly and a failure to protect investors’ rights as a result, the world is looking for an alternative form of stock market for quite some time so that interests of all relevant stakeholders can be safeguarded. At the same time, from the perspectives of devout Muslims, the current form of stock market restricts a Muslim to make investments in the market because of several unsatisfying provisions from the viewpoint of the Islamic law known as Shariah. This study aims to provide the criteria under which conditions of the Islamic Shariah permit making investments in the stock market. Hand in hand with that primary discussion, it has been eluded briefly why the Islamic Shariah principles offer a better alternative against conventional practices of the stock market.
Design/methodology/approach
This is a descriptive study based on the literature review.
Findings
This study explores the basic Islamic principles of investment in the stock market by revisiting the norms laid down by Shariah and current global practices of Islamic stock market and indexes.
Originality/value
This study will work as a guideline for investors and market authorities to understand the original Shariah rulings and the benchmark rulings for investment or establishing full-fledged Islamic stock markets, indexes and mutual funds.
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Akilu Aliyu Shinkafi and Nor Aini Ali
The purpose of this paper is to come-up with a systematic exertion on Maqasid Shari’ah in Islamic economics, banking and finance, with a clear focus on forming an appropriate and…
Abstract
Purpose
The purpose of this paper is to come-up with a systematic exertion on Maqasid Shari’ah in Islamic economics, banking and finance, with a clear focus on forming an appropriate and novel framework that identifies the effort of contemporary scholars and detects the existing gap that might possibly champion new research commitments.
Design/methodology/approach
A systematic approach to literature review was steered through the means propagated by the Centre for Reviews and Disseminations (DSR), but modified to the precise requirements of this review. Google Scholar was searched throughout the passage. The search criteria are confined to English documents that are within the period of 2006-2016. Articles that did not score or did not convince that the subject of Maqasid Shari’ah has been applied in Islamic economy, Islamic banking, Islamic finance, Islamic financing products and economic development are excluded. Appropriate search keys are used to gather better results.
Findings
The findings inform that contemporary scholars show a robust commitment to the themes of the result during the stated period. The outcome reveals that contemporary scholars designate more interest and attention on Islamic banking and expose their potential specialty in the expanse than other themes. The study further highlighted the gap of some significant areas that are either outside the coverage of the reviewed documents or require more attention from contemporary scholars, for instance, wealth formation and management, wealth consumption, socioeconomic security, risk management, corporate governance, management policy, human resource development, prohibition of Riba, profit and loss sharing (PLS), etc.
Research limitations/implications
The paper is limited to contemporary aspects of Islamic economics, banking, finance and economic development that have a link with the subject of Maqasid Shari’ah.
Practical implications
A review of these scholarly reported documents has the potential to draw attention toward filling the existing gap that will likely result in salvation of current issues on the subject of Maqasid Shari’ah that has a direct association with Islamic economy, banking and finance.
Originality/value
The paper is original in its nature considering the fact that it is assumed as the maiden attempt of its kind in the field. It is a treasure to all those who may cherish and find it relevant in their progressive and rounded convention or application on the matter.
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Suhaili Alma'amun, Mohd Khairy Kamarudin, Wan Nadiah Wan Mohd Nasir, Nasrul Hisyam Nor Muhamad and Riayati Ahmad
This research aims to examine and compare differences in waṣiyyah wājibah (obligatory bequest) (WW) practices in Malaysia and Indonesia.
Abstract
Purpose
This research aims to examine and compare differences in waṣiyyah wājibah (obligatory bequest) (WW) practices in Malaysia and Indonesia.
Design/methodology/approach
This is an exploratory qualitative research, employing a thematic analysis approach. Six Muslim Wills (State) Enactments [Enakmen Wasiat Orang Islam (Negeri)] in Malaysia, Islamic Law Compilation (Kompilasi Hukum Islam) in Indonesia, two fatwas (ruling in religious matters) and one court case from each country are analysed. Data is collected from official government websites and other reliable search engines.
Findings
First, the findings show that the WW practice in both countries is similar regarding the quantum of the beneficiaries' entitlement. However, the practice varies between both countries in terms of the types of beneficiaries and how the bequest is distributed. Second, this study shows the potential of WW as an estate planning instrument to complement the existing instruments in each country, especially when addressing family members who are not entitled to succeed by farāʾiḍ (Islamic inheritance law).
Practical implications
The provision of relevant laws and regulations regarding WW needs to be formulated to guarantee the well-being of dependants. The differences in practice between the two countries can be a guideline to expand the WW scope and context to other Muslim countries.
Originality/value
This study is the first attempt to compare WW between two Muslim-majority countries focusing on relevant laws, court cases and regulations.
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Khadija Echefaj, Abdelkabir Charkaoui, Anass Cherrafi, Jose Arturo Garza-Reyes, Syed Abdul Rehman Khan and Abla Chaouni Benabdellah
Selecting the optimal supplier is a challenging managerial decision that involves several dimensions that vary over time. Despite the considerable attention devoted to this issue…
Abstract
Purpose
Selecting the optimal supplier is a challenging managerial decision that involves several dimensions that vary over time. Despite the considerable attention devoted to this issue, knowledge is required to be updated and analyzed in this field. This paper reveals new opportunities to advance supplier selection (SS) research from a multidimensional perspective. Moreover, this study aims to formalise SS knowledge to enable the appropriate selection of sustainable, resilient and circular criteria.
Design/methodology/approach
This study is developed in two stages: first, a systematic literature review is conducted to select relevant papers. Descriptive and thematic analyses are employed to analyze criteria, solving approaches and case studies. Second, a criterion knowledge-based framework is developed and validated by experts to be implemented as ontology using Protégé software.
Findings
Evaluating the viability of suppliers need further studies to integrate other criteria and to align SS objectives with research advancement. Artificial intelligence tools are needed to revolutionize and optimize the traditional techniques used to solve this problem. Literature lucks frameworks for specific sectors. The proposed ontology provides a consistent criteria knowledge base.
Practical implications
For academics, the results of this study highlight opportunities to improve the viable SS process. From a managerial perspective, the proposed ontology can assist managers in selecting the appropriate criteria. Future works can enrich the proposed ontology and integrate this knowledge base into an information system.
Originality/value
This study contributes to promoting knowledge about viable SS. Capitalizing the knowledge base of criteria in a computer-interpretable manner supports the digitalization of this critical decision.