Performance of Islamic banks based on maqāṣid al-sharīʿah: a systematic review of current research

Abstract

Purpose This study aims to systematically explore the approaches used by previous studies in measuring the performance of Islamic banks based on maqāṣid al-Sharīʿah. Design/methodology/approach The data obtained in this study were derived from a review of empirical literature based on 15 articles published between 2012 and 2019. The sample articles on the performance of Islamic banks based on maqāṣid al-Sharīʿah were located by searching keywords in the most relevant social science research databases such as Scopus, Web of Science and EBSCOhost. Findings The emerging trend in measuring the performance of Islamic banks from the maqāṣid perspective highlighted that there is insufficient research on the determinants of Islamic bank performance. Practical implications The reviews undertaken in this paper will resolve the literature gaps in the area of maqāṣid al-Sharīʿah and Islamic banks, as this study serves as a reference for scholars, academicians and interested researchers in Islamic banking and finance studies to pursue more research in this area. Social implications Performance measurement based on maqāṣid al-Sharīʿah enhances society’s confidence in supporting Islamic banking practices, particularly among the Muslim community. Islamic banks can also be exemplary financial intermediaries supporting fair and equitable financial systems for the entire community. Originality/value This paper is original in its nature, considering that understanding the relationship between maqāṣid al-Sharīʿah and the performance of Islamic banks is limited. This paper reveals a literature gap that can be explored by future studies theoretically and practically.