Browsing by Author "Muhammad Nadeem Khalil"

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    Interest rate volatility and the performance of islamic banks
    (UNIVERSITY OF MANAGEMENT AND TECHNOLOGY, 2015) Muhammad Nadeem Khalil
    Market interest rates in an economy keep on changing. The objective of this research study was to analyze the impact of interest rate changes on the performance of Islamic Banks. For this purpose, four independent variables named, Discount Rate (DR), Karachi Interbank Offer Rate (KIBOR), Treasury bill (T.bill) rate, and PakistanInvestment Bond (PIB) rate were taken as a proxy for interest rates while the performance of Islamic Banks was measured using Return of Asset (ROA) and Return on Equity (ROE) ratios. Secondary data was used for this research study which was obtained from the State Bank of Pakistan's official website. Vector Auto Regression (VAR) model, Impulse Response Function (IRF) and Variance Decomposition Analysis (VDA) was used to see the impact of interest rate changes on the performance of Islamic Banks. The findings showed that there was not a significant impact of interest rate changes on the performance of Islamic Banks. The study also concluded that although Islamic Banks use KIBOR as benchmark rate, Islamic banks still able to effectively mitigating interest rate risks by using various interest mitigating techniques. The research also recommended that Islamic Banks, instead of using KIBOR as benchmark should adopt a business model which do not take into consideration the market interest rates and carry out their operation keeping in view the true principles of Islam. A complete new business model for Islamic Banks is proposed in this regard.
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    Islamic Banking Model in the Light of Maqasid al Shariah: A Way Forward
    (UMT, Lahore, 2024) Muhammad Nadeem Khalil
    Islamic banking has made tremendous growth over the last twenty years all over the world including Pakistan. However various studies conducted by well-renowned researchers indicate Islamic banks have failed to achieve Maqasid al Shariah. Socioeconomic indicators in Pakistan also support the results of these research studies with increasing poverty, unemployment, and unequal distribution of wealth in Pakistan which indicates Islamic banks are not contributing effectively towards the socio-economic well-being of the people and achieving Maqasid al Shariah. The objective of conducting this study is to evaluate the current practices of Islamic banks in the light of Maqasid al Shariah, analyze why Islamic banks have failed in achieving Maqsid al-Shariah, and then develop an Islamic banking model in the light of Maqasid al Shariah to achieve Maqsid al-Shariah. To achieve this objective, this study employs a qualitative, exploratory research methodology in which face-to-face semi structured interviews with Shariah Supervisory Board (SBB) members of Islamic banks, Shariah scholars, academicians, and policymakers are conducted by using a non-probability purposive sampling technique. A total of 46 participants for this study is contacted out of which 20 participants are interviewed keeping in view the purpose and nature of the study. The grounded theory approach is used in this research and data is analyzed by using NVIVO software. The results of this study show that current practices of Islamic banks are not achieving Maqasid al Shariah and there is a dire need of developing and new model of Islamic banking to achieve Maqasid al Shariah. In addition, factors due to which Islamic banks have failed to achieve Maqasid al Shariah are also identified. The role of various stakeholders such as the government, regulator of Islamic banks (State Bank of Pakistan), Islamic banks, and the general public has been identified for the development of the Islamic banking model in the light of Maqasid al Shariah. Fruitful recommendations regarding the opening of current accounts, Mudaraba accounts, subsidiary Mudaraba companies accounts, restricted accounts, Wakala accounts, Waqf accounts, charity accounts, Zakat accounts, and practical procedure of Musharakah and Mudarabah financing, etc. are made for structuring the asset and liability side of Islamic banks for the development of the Islamic banking model in the light of Maqasid al Shariah.