ISSN: 2222-6990
Open access
Value Based Intermediation (VBI) initiative stemmed from Bank Negara Malaysia (BNM) or the Central Bank of Malaysia’s observation that maqasid al-Shariah (the objectives of Shariah) was not fully being implemented in Islamic banks since 1983. However, some Islamic banks have claimed that even before the idea of VBI was brought forward by BNM, maqasid al-Shariah had already been existent in their banking operations. This study aims to compare the practice of some Islamic banks in realizing maqasid al-Shariah through their available products and services before and after VBI implementation. This study adopts a qualitative research methodology whereby the information on VBI implementation was gained from semi-structured interviews conducted with bankers from three Islamic banks in Malaysia directly involved with VBI implementation. This study has found that maqasid al-Shariah had indeed been realized by Islamic banks even before the implementation of VBI. However, this VBI initiative was a boost in assisting Islamic banks to structuralize their efforts in achieving maqasid al-Shariah and help strategize their initiatives through practices, the business conducts and offerings of their products and services. As a result, Islamic banks can generate a positive and sustainable impact on the economy, community, and environment, consistent with the shareholders’ sustainable returns and long-term interest and achieving maqasid al-Shariah. Future research should involve all Islamic banks which practice VBI in their banking operation.
Agrobank. (2020). Agrobank is a leader in agriculture financing and values-based banking based (VBI) in Malaysia. Retrieved November 10, 2020, from https://www.agrobank.com.my/home/corporate-info/about-agrobank/
Al-Ghazali. (1997). Al Mustasfa min ilm al-Usul. Beirut: Dar Ihya’ al-Turat al-Arabi.
Association of Islamic Banking and Financial Institutions Malaysia (2020). Value based intermediation (VBI). Retrieved September 5, 2020, from https://aibim.com/VBI_VBIAF_Sectoral_Guide_Public_Consultation
Asutay, M., & Harningtyas, A. F. (2015). Developing Maqasid al- Shar’ah index to evaluate social performance of Islamic banks: A conceptual and empirical attempt. International Journal of Islamic Economics and Finance Studies., 1 (1), pp. 5-64.
Asutay, M., & Sidek, M. N. Z. (2020). Political economy of Islamic banking growth: Does political regime and institutions, governance and political risks matter? International Journal of Finance and Economics; 1-36. https://doi.org/10.1002/ijfe.2011
Aziz, M. R. A. (2011). Opportunity for agro entrepreneur in developing agro initiative in Islamic banking in Malaysia. The Journal of Animal and Plant Sciences, 21(2), 290-302.
Bank Islam. (2020). Sadaqa House. Retrieved November 10, 2020, from http://www.bankislam.com.my/home/assets/uploads/Sadaqa-House-Pamphlet.pdf
Bank Negara Malaysia (2018a). Value-based intermediation: Strengthening the roles and impact of Islamic finance. Retrieved June 21, 2018, from https://www.bnm.gov.my/index.php?ch=57&pg=137&ac=612&bb=file
Bank Negara Malaysia. (2018b). Value-based intermediation scorecard. Retrieved June 11, 2020, from https://www.bnm.gov.my/documents/2018/Value-based%20Intermediation%20Scorecard%20(Consultative%20Document).pdf
Bank Negara Malaysia. (2018c). Implementation guide for value-based intermediation. Retrieved November 11, 2018, from https://www.bnm.gov.my/documents/2018/Implementation%20Guide%20for%20Value-based%20Intermediation.pdf
Caporale, G. M., & Helmi, M. H. (2018). Islamic banking, credit, and economic growth: Some empirical evidence. International Journal of Finance and Economics, 23 (4), 456-477. https://doi.org/10.1002/ijfe.1632
Dusuki, A. W., & Bouheraoua, S. (2011). The framework of maqasid al-shari?ah and its implication for Islamic finance. Islam and Civilisational Renewal, 2(2), 316 – 336.
Hamid, N. A., Muda, R., Alam, M. M., Omar, N., & Nadzri, F. A. A. (2019). Contribution of Islamic social capital on green economic growth in Malaysia. International Journal of Business and Management Science, 9(2), 239-256.
Hassan, R., & Nor, F. M. (2019). Value-based intermediation: An analysis from the perspective of Shariah and its objectives. International Journal of Fiqh and Usul al-Fiqh Studies, 3 (1), 81-89.
Ishak, M. S. I., & Asni, F. (2020). The role of maqasid al-Shari?ah in applying fiqh muamalat into modern Islamic banking in Malaysia. Journal of Islamic Accounting and Business Research, 11 (9), 2137-2154.
Ibn Ashur, M. A. (2006). Treatise on Maqasid al-Shariah. (Mohamed el-Tahir el-Mesawi, Trans.). Herdon: International Institute of Islamic Thought.
Lahsasna, A. (2013). Maqasid al-Shariah in Islamic finance. Kuala Lumpur: IBFIM.
Lo, C. W., & Leow, C. S. (2014). Islamic banking in Malaysia: A sustainable growth of the consumer market. International Journal of Trade, Economics and Finance,5(6), 526-529.
Mohammed, M. O., Tarique, K. M., & Islam, R. (2015). Measuring the performance of Islamic banks using maqasid-based model. Intellectual Discourse, 23, 401-424.
Muhamat, A. A., Jaafar, M. N., & Basri, M. F. (2017). Corporate social performance (CSP) influences on Islamic bank’s financial performance. Journal of International Business, Economics and Entrepreneurship, 2 (1), 11-16.
Olapado, I. A., Arshad, R., Muda, R., & Hamoudah, M. M. (2019). Perception of stakeholders on governance dimensions of the Islamic banking sector. International Journal of Emerging Markets, 14 (4), 601-619.
In-Text Citation: (Alwi et al., 2021)
To Cite this Article: Alwi, S. F. S., Halim, F. A., Ahdiyaty, T. D., Mazlin, T. A., Kadir, A. H. A., Hassan, R., & Fikri, A. A. H. S. (2021). Examining Maqasid Al-shariah in Islamic Banks: Before and after Value-Based Intermediation Implementation. International Journal of Academic Research in Business and Social Sciences, 11(9), 964–974.
Copyright: © 2021 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode