Work

The effect of Al-Bai’ and wadiah contracts on sharia compliance and the sharia banking system performance through the Maqashid Index in sharia banks in Indonesia

Year: 2019

Type: article

Abstract: This study sought to test and find empirical evidence on the effect of Al-Bai’ and wadiah contracts on sharia compliance and the performance of sharia banking system through the Maqashid sharia index. The study employed the explanatory research design, aimed at explaining a causal relationship among variables using a quantitative approach. The Partial Least Square (PLS) model was used as the analysis method to answer the hypotheses of this study. The authors found out that increases and decreases in wadiah contracts did not influence the financial performance of sharia banks. Another finding also showed that Al-Bai’ and wadiah contracts and sharia compliance had a significant effect on the performance of public sharia banks. This result evidenced that the concept of an Islamic bank should be a mediator, which should neither allow profiting from the fund, nor should be used to invest in the real sector of various funding systems.

Source: Banks and Bank Systems

DOI: 10.21511/bbs.14(4).2019.10

Authors: Wahyuniati Hamid, Ubud Salim, Djumahir, Siti Aisjah

Institutions: Universitas Halu Oleo, University of Brawijaya

Language: English

Topic: Islamic Finance and Banking Studies

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: gold

Estimated APC paid: $641