An Analysis of Islamic Banking Performance: Maqashid Index Implementation in Indonesia and Jordania

Authors

  • Muhammad Syafii Antonio Tazkia University College of Islamic Economics
  • Yulizar D Sanrego Tazkia University College of Islamic Economics
  • Muhammad Taufiq Tazkia University College of Islamic Economics

DOI:

https://doi.org/10.31436/jif.v1i1.2

Abstract

The discourse on the presence of Islamic banking in the global era went broadly and extensively. It is because the society has begun realizing the existence of Islamic banking. Islamic banking does able to show its resilience and endurance facing the global financial crisis. A part from its positive growth, there exist a critical issue related to it performance measurement. For the time being, the performance measurement of Islamic banking industries merely uses the financial ratio measurement (shareholder oriented). Indeed, this financial ratio measurement is necessary but unfortunately not sufficient. Therefore, Islamic banking that is different from conventional banking both in theory and practice, needs a shifting paradigm in term of their performance measurement which not only limited to the financial ratios (stakeholders oriented). This paper would like to apply Maqashid Index approach for the measurement of Islamic banking industry performance. The object of this research is Islamic banking industries in Indonesia (Bank Syariah Mandiri and Bank Muamalat Indonesia) and Jordan (Jordan Islamic Bank and Islamic International Arab Bank Jordan)). Using Maqashid Index approach with SAW (Simple Additive The weighting) method, it can be concluded from the first measurement using Maqashid Index that Islamic banking industries in Indonesia which represented by BMI (0.17839) and BSM (0.16190) show better performance in comparison with Islamic banking industries in Jordan, namely IIABJ (0.10295) and JIB (0.08152).

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How to Cite

Antonio, M. S., Sanrego, Y. D., & Taufiq, M. (2014). An Analysis of Islamic Banking Performance: Maqashid Index Implementation in Indonesia and Jordania. Journal of Islamic Finance, 1(1). https://doi.org/10.31436/jif.v1i1.2

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Articles