There are some academic efforts that have tried to measure corporate social responsibility (CSR) in Islamic banks (IBs) practices. But there is very lack in measuring the CSR of IBs through their operations not through their oriented outcomes. This article has suggested Musharakah and equity as new items to fill the important gap in measuring field of IBs’ CSR. In this work, the Musharakah is social and economic tool in IB finance and it is for the customers. Whilst the equity is a type of investments in IBs, in which the bank is as shareholder in other business organizations. It is coming from the deeper understanding of Shari’ah principles (Maqasid Shariah) in Islamic business world. With both cases (Musharakah with customers or equity with investors) IBs will share other in loss and profit and they are more far from Riba (interest rate) as in conditional banks. Not enough that IBs are undergo for Islamic law (Fiqhi) to reach the best level of CSR but they should have investments and financing that based on broad utility for the society. That is not mean that oriented-outcome side is not important of the IB’s CSR.
|Number of pages||8|
|Journal||International Journal of Economics and Financial Issues|
|Publication status||Published - 28 Jul 2015|
Bibliographical noteFunding Information:
This work was co-funded by the National Natural Science Foundation of China (NSFC) under Grant No. 42001084, and the Strategic Programme Fund (SPF) project, “Guangdong—China’s Pilot Province in Exploring a Shift to Low Carbon Economy,” which was supported by the British Foreign & Commonwealth Office.
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