An Analysis of Islamic Banks Performance using Sharia Maqashid Index, Sharia Conformity and Profitability (SCnP) and CAMELS

Main Article Content

Mokhamad Ikhsan Ramdhoni
Firdaus Ahmad Fauzi

Keywords

Islamic Banking, Performance, Measurement, Finance, Sharia

Abstract

Indonesian Islamic banking system has existed for more than 25 years old. However, at this age, it still has not had its own instrument for measuring performance and still adopts the orthodox measuring instrument which is restricted to financial ratio measurement only. The use of this orthodox measuring instrument as the only tool to evaluate the Islamic banks performance is considered less suitable, both in terms of the features and the purposes of Islamic banking in general. Therefore, this study aims to evaluate the performance of Islamic banks using the Sharia Maqashid Index, Sharia Conformity and Profitability (SCnP) and CAMELS approaches. The population of this study was all Islamic Commercial Banks listed in Bank Indonesia from 2012-2016, while the data analysis technique used the quantitative research with descriptive approach. The Sharia Maqashid Index approach has three variables; educating people, establishing justice, and achieving public interest. The Sharia Conformity and Profitability (SCnP) approach has two variables; Sharia Conformity and Profitability. Meanwhile, the CAMELS approach has five variables; Capital, Asset Quality, Management, Earning, and Liquidity. The results of the research using the Sharia Maqashid Index approach shows that Bank Muamalat is in the first rank, followed by Bank Syariah Mandiri, BNI Syariah, and Bank Mega Syariah. By using the SCnP approach, the research shows that there are no Islamic banks in the upper right quadrant that has high sharia suitability and high profitability. Moreover, the CAMELS approach shows that all Islamic banks are quite healthy. The application of these performance measurement approaches become a factor that plays a dual role for the achievement of financial performance and sharia conformity.

Downloads

Download data is not yet available.
Abstract 146 | pdf Downloads 117

References

Al-Fasy, A. (1993). Maqashid asy-Syari’ah al-Islamiyyah wa Makarimuha. KSA: Darul Garb Al-Islamy.
Al Ghifari, M., Handoko, L.H., & Yani, E. A. (2015). Analisa Kinerja Perbankan Syariah di Indonesia dan Malaysia dengan Pendekatan Maqashid Indeks. Jurnal Ekonomi dan Perbankan Syariah, 3(2), p. 47-66.
Antonio, M. S., Sanrego, Y.D., & Taufiq, M. (2012). An Analysis of Islamic Banking Performance: Maqashid Index Implementation in Indonesia and Jordania. Journal of Islamic Finance, 1(1), p. 012-029.
Ayub, M., Paldi, C. (2015). Dichotomy between Syariah Compliance and The Economic Goals of Islamic Financial Institutions. Journal of Islamic Business and Management, 5(2), p. 69-98.
Bank Indonesia. (2007). Peraturan Bank Indonesia tentang Sistem Penilaian Tingkat Kesehatan Bank Umum Berdasarkan Prinsip Syariah. Nomor: 9/1/PBI/2007.
Bedoui, H. (2012). Sharia-based Ethical Performance Measurement Framework. Chairs for Ethics and Financial Norms, p. 1-12.
Bedoui, H., & Walid, M. (2013). Islamic Bank Performance and Maqashid Al Shariah. Makalah disampaikan pada 9th Asia-Pasific Economics Association Conference, di Osaka, Jepang, 27-28.
Chapra, U. (2000). Sistem Moneter Islam (I. A. Bashri, Trans.). Jakarta: Gema Insasi Press & Tazkia Press.
Hameed, S., Wirman, A., Alrazi, M. N., & Pramono, S. (2004). Alternative Disclosure & Performance Measures for Islamic Banks. Second Conference on Administrative Sciences: Meeting the Challenges of the Globalization Age, King Fahd University of Petroleum & Minerals, Dhahran, Saudi Arabia, p. 19-21.
Hendri, L. (2017). Analisis Kesehatan Bank Syariah (Keterbatasan CAMELS Mengevaluasi Kesehatan Bank Syariah). Jurnal Akad, 1(1), p. 26-44.
Jauziyah, I. Q. (1973). I’lamul Muwaqqi’in ‘an Rabbil Alamin (T. A. R. Sa'd Ed.). Beirut: Darul Jail.
Kuppusamy, M., Saleha, A. S., & Samudhram, A. (2010). Measurement of Islamic Banks Performance Using a Shariah Conformity and Profitablity Model. Review of Islamic Economics, 13(2), p. 35-48.
Mohammed, M. O., Razak, D.A. (2008). The Performance Measures of Islamic Banking Based on the Maqashid Framework. Paper of IIUM International Accounting Conference (INTAC IV) held at Putra Jaya Marroitt, p. 1-17.
Prasetyowati, L. A., & Handoko, L.H. (2016). Pengukuran Kinerja Bank Umum Syariah dengan Maqashid Index dan Sharia Conformity and Profitability (SCnP). Jurnal Akuntansi dan Keuangan Islam, 2(2), p. 107-130.
Ratnaputri, W. (2013). The Analysis of Islamic Banking Financial Performance by Using CAMEL, Shariah Conformity and Profitablity (SCnP) Jurnal Dinamika Manajemen, 4(2), pp. 220-232.
Sarwono, J. (2006). Metode penelitian kuantitatif dan kualitatif. Yogyakarta: Graha Ilmu.
Sekaran, U. (2000). Research methods for business: a skill building approach. New York: John Wiley & Sons.
Siddiqi, M. N. (2000). Islamic banks: concept, percept, and prospects. Review of Islamic Economics, 9, p. 21-36.
Suhartanto, D., Dean, D., Nansuri, R., & Triyuni, N.N. . (2018). The link between Tourism Involvement and Service Performance: Evidence from Frontline Retail Employees. Journal of Business Research, 83, p. 130-137.
Sukardi, B., Wijaya, T., & Wardani, M.K. . (2016). Inklusivisme Maqasid Syariah Menuju Pembangunan Berkelanjutan Bank Syariah di Indonesia Jurnal Tsaqafah, 12(1) p. 209-230.
Ulum, I. (2005). Akuntansi Sektor Publik Sebuah Pengantar Malang: Universitas Muhammadiyah Malang.
Wulandari, P. A. (2018). Analysis of Islamic Banking Performance in Indonesia and Malaysia with Maqashid Sharia Index. (Bachelor Degree), Universitas Islam Indonesia, Yogyakarta.
Yuwono, S., Sukarno, E., & Ichsan, M. . (2002). Petunjuk Praktis Penyusunan Balanced Scorecard: Menuju Organisasi Yang Berfokus Pada Strategi. Jakarta: Gramedia Pustaka Utama.
Zaharah, M. A. (1997). Usul al-fiqh. Cairo: Dar al-Fikr al-‘Arabi.
Zaman, M. R., Movassaghi, H. (2002). Interest-Free Islamic Banking: Ideals and Reality International Journal of Finance, 14(4), p. 2428-2442.