Maqashid Syariah and Profitability of Islamic Banks in Indonesia: Quadrant Analysis Measurement Approach

DOI

10.2991/aebmr.k.211225.014How to use a DOI?

Keywords

maqashid shariah; profitability; sharia banking; sharia principles

Abstract

Islamic banks are required to comply with sharia principles in conducting their business. One of the principles of sharia is maqashid sharia. Maqashid sharia carries social values such as the value of education, justice, and economic prosperity. Nowadays, apart from pursuing profit, Islamic banks should also comply with maqashid sharia principles. This study aims to determine the social role of Islamic banks in addition to the business objectives of Islamic banks and achieving profitability in 4 Islamic banks. They are Bank Muamalat Indonesia (BMI), BRI Syariah (BRIS), BNI Syariah (BNIS), and Bank Syariah Mandiri (BSM). The method used to determine maqashid sharia measures the maqashid sharia index (MSI). At the same time, profitability is known by using the comparative performance index method in four Islamic banks spread across Indonesia in 2019-2020 quarter. To determine the achievement of maqashid sharia and profitability, a quadrant analysis measurement (QAM) was performed. The results showed that only BMI belonging to the ULQ quadrant (not good SMI and good profit) and BRIS, BNIS, and BSM entered the LLQ quadrant (not good maqashid sharia, not good profit) on a quarterly average in the research year. Therefore, the Indonesian central bank can provide incentives, especially for Islamic banks in Indonesia that are not good at sharia maqashid, and urge Islamic banks to include maqashid sharia principles in the vision and mission of Islamic banks. Indonesia’s central bank can also encourage Islamic banks that are also not doing well in achieving profits by switching to digital technology to increase efficiency, continue to innovate while increasing the convenience of bank services.

Copyright

© 2022 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Setyo Tri Wahyudi
AU  - Kartika Sari
AU  - Rihana Sofie Nabella
PY  - 2022
DA  - 2022/01/13
TI  - Maqashid Syariah and Profitability of Islamic Banks in Indonesia: Quadrant Analysis Measurement Approach
BT  - Proceedings of the International Conference on Sustainable Innovation Track Accounting and Management Sciences (ICOSIAMS 2021)
PB  - Atlantis Press
SP  - 86
EP  - 91
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.211225.014
DO  - 10.2991/aebmr.k.211225.014
ID  - Wahyudi2022
ER  -