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Reforms required for shariah screening of equities using the case study of Dow Jones Islamic Market Index (DJIMI)
Rizwan Malik; Humayon Dar; Aishath Muneeza (Emerald Publishing Limited., 2025)

Purpose There is no uniform methodology adopted worldwide for Shariah equity screening. The purpose of this research paper is to suggest reforms required to improve Shariah screening methodologies used for equities using Dow Jones Islamic Market Index, which is the world’s first such methodology adopted. Design/methodology/approach This research uses a qualitative research methodology that goes beyond analysing secondary data on the subject matter. It includes conducting semi-structured interviews with selected subject matter experts to gain insights into the practical issues associated with existing Shariah screening methodologies. The aim is to identify areas for potential reforms that can be implemented in the future. By combining secondary data analysis with first-hand perspectives from experts, this research provides a comprehensive understanding of the challenges and opportunities in Shariah screening, contributing to the development of practical and effective reforms. Findings The study recommends the inclusion of additional filters in Shariah screening methodologies to promote stocks that are not only Shariah-compliant but also socially responsible. It suggests that while a certain level of Shariah non-compliance threshold may be tolerated during the initial screening stage, over time, this accepted threshold should gradually decrease. The ultimate goal is to achieve 0% thresholds for Shariah-compliant equities. By advocating for stricter criteria and a progressive reduction in non-compliance tolerance, the study highlights the importance of continuously improving and refining Shariah screening practices to ensure higher levels of compliance and alignment with Shariah principles. Originality/value It is anticipated that the findings of this research provides original insights and contributions to existing knowledge. It offers novel perspectives, innovative approaches and solutions to address specific areas in need of reform. By focusing on enhancing the effectiveness and standardisation of Shariah-compliant investment practices, the research brings fresh perspectives and adds value to the field. Its unique contribution lies in identifying and addressing emerging challenges and proposing improvements in Shariah screening methodologies.

Publication
Unprecedented growth across banking, waqf and zakat sectors in the Maldives
Aishath Muneeza (Redmoney, 2025)

Islamic finance in the Maldives is experiencing remarkable progress, with significant developments in banking, waqf investment and zakat collection, reflecting increased public trust and institutional efficiency in the sector. Maldives Islamic Bank (MIB), the country's first full-fledged Islamic bank, has announced a record net profit of MVR282 million (US$18.26 million) for 2024, marking a 60% increase compared to the previous year. The bank's total asset value grew from MVR10 billion (US$647.6 million) in November 2023 to MVR11.4 billion (US$738.1 million) by the end of 2024. MIB attributes its success to improved customer confidence, enhanced digital services and innovative banking solutions. The bank is the only one in the Maldives that offers online account opening services, which contributed to a rise in deposits to MVR9.12 billion (US$590.48 million) by year-end. MIB also won two international awards in 2024, further cementing its position in the global Islamic finance sector.

Publication
Islamic finance and sustainable development
M. Kabir Hassan; Rashedul Hasan; Aishath Muneeza (Cambridge University Press, 2025)

Islamic finance is rooted in Shariah or Islamic law, which promotes the well-being of humanity and discourages harmful practices. This Element highlights the nexus between Islamic finance and sustainable development, emphasizing the ethical and socially responsible nature of Islamic finance. It discusses how Islamic financial institutions contribute to sustainable development through the achievement of Sustainable Development Goals , Environmental, Social, and Governance criteria, and Socially Responsible Investment practices. Case studies from different parts of the world demonstrate practical applications of Islamic finance principles in supporting SDG. It suggests reforms that can unlock the full potential of Islamic finance, including the institutionalization of Islamic social finance, convergence with commercial finance, leveraging technology, integrating Shariah-based financial products, considering social return as a benchmark for approving products, introducing blended finance, and collaborating with humanitarian agencies. The potential of Islamic finance for sustainable development provides valuable insights for academicians, practitioners, and policymakers.

Publication
ESG and banking performance in emerging and developing countries: do Islamic banks perform better?
Faaza Fakhrunnas; Turalay Kenc; Zhang Ali Hengchao (Ali Zhang) (Bank Indonesia Institute, 2025)

This paper investigates the effects of Environmental, Social, and Governance (ESG) implementation on banking performance in emerging and developing countries. Applying the Two-step System Generalized Method of Moments (System-GMM) to panel data of 179 banks across 29 countries spanning 2016-2022, we find that ESG implementation significantly enhances overall banking profitability. However, when we assess the implications of ESG on Islamic banks, we find that overall ESG commitment significantly reduces profitability. As for the individual ESG pillar, we note the profit-enhancing effect of environmental pillar on both Islamic and conventional bank profitability. Some evidence is also uncovered for the significant positive effect of social pillar on conventional bank profitability. Finally, we note no significant influences from governance pillar. These results highlight the divergent impacts of ESG implementation on Islamic and conventional banks. We conclude that policymakers should exercise caution in designing and implementing ESG policies, ensuring they are tailored to promote optimal performance across different banking models. This study contributes to the growing body of the literature on sustainable finance and provides valuable insights for regulators and bank managers in emerging and developing economies.

Publication
Intellectual property and Islamic finance policy framework: opportunities and challenges for a new Islamic intellectual property finance framework
Nadia Naim; Noor Suhaida Kasri (Wiley Periodicals LLC, 2025)

This paper explores the intersection of Intellectual Property (IP) and Islamic finance, proposing a policy framework to integrate IP valuation into Sharia-compliant financing. Focusing on the UK, it also extends to global markets, including ASEAN, GCC, and MENA regions. The paper identifies gaps in current practices, particularly in incorporating IP assets into Islamic financial products, highlighting untapped market potential. It emphasizes the need for regulatory compliance, Sharia board approvals, and robust audit mechanisms to ensure ethical integration. Key recommendations include developing a comprehensive IP frame work, fostering international collaboration, and capacity building through education. The framework aims to align economic growth with ethical financing, enhancing transparency and the robustness of Islamic IP financing globally.