Do depositors discipline Islamic banks in a dual-banking system by reallocating funds when Islamic returns fall below conventional rates, or does Islamic-conventional rate co-movement arise from bank-level pricing behaviour? Using 117 months of tenor-specific data from Indonesia (June 2014 to February 2024), we test the spread to-flow mechanism that the standard displaced-commercial-risk narrative presupposes. The Islamic-conventional spread does not predict aggregate Islamic deposit flows (?? = 0.002, p = 0.681; R� < 1%), and the null survives asymmetric specification, enriched controls, alternative spread definitions and tenor-matched flow regressions. A Shapley-Owen R� decomposition attributes 87�91% of the explained variation in Islamic rate changes to conventional benchmarks across the four tenors. The in-sample R� is low (3�5%), but the qualitative ranking is supported by a levels specification and is directionally consistent with a rolling out-of-sample comparison. A nonlinear ARDL model and local-projection impulse responses both show that Islamic rates respond faster to conventional rate cuts than to rate increases at the 3-month tenor; the evidence for asymmetry at other tenors is weaker and does not survive a change of method. We read the deposit-flow null as evidence against active aggregate depositor discipline rather than as a rejection of bank-level discipline operating through other channels. The benchmark-dominance and asymmetry results agree with supply-side benchmark pricing without uniquely identifying it. These findings caution against treating mudarabah-deposit pricing in a low-share dual banking system as evidence of risk-sharing, whether in monetary-transmission models or in governance frameworks.

This study proposes the INCEIF Impact Index Model (IIIM), a holistic measurement methodology framework, to measure the socioeconomic and spiritual impact of Islamic social finance (ISF) initiatives in Islamic banks. The model, grounded in maqasid al-Shari'ah (the higher objectives of Islamic law), aims to overcome the drawbacks of current evaluation instruments, which focus mainly on material or financial performance and fail to consider the spiritual, ethical, and moral aspects of falah (human well-being). This study is designed according to a qualitative conceptual research approach which focuses on creating the IIIM as a comprehensive framework for impact measurement of ISF initiatives. The systematic review of relevant literature, content analysis of Islamic sources, conceptual synthesis, and expert validation methods are used to develop the framework. The study aims to combine the material and spiritual aspects of human welfare into an integrated assessment system grounded in the concepts of tawhid (unity of knowledge) and maqasid al-Shari'ah. This paper proposes a six-dimensional impact framework comprising faith and ethics, human well-being, knowledge and education, family and society, economic justice, and environmental stewardship. The IIIM illustrates that ISF interventions have multidimensional effects that go beyond income and consumption to include ethical behaviour, spiritual resilience, social cohesion and sustainability. The model operationalises welfare within the maqasid hierarchy of necessities (daruriyat), needs (hajiyat) and refinements (tahsiniyat), and allows differentiating the progression of beneficiaries towards holistic well-being. The paper adds to the current body of knowledge by proposing a new integrative index that synthesises the maqasid al-Shari'ah principles, embeds the Ekonomi MADANI values, and integrates the Sustainable Development Goals (SDGs) within a single framework for assessing ISF initiatives. The present study focuses on the conceptual development of the IIIM and does not provide empirical findings or statistical validation of the proposed model. Future studies are needed to operationalise and test the model using large-scale empirical data, applying statistical techniques such as Principal Component Analysis (PCA) to ensure the proposed model is reliable and validate the constructs. Future research should also be undertaken to determine the model�s applicability across different institutional contexts including zakat, waqf and takaful, and to use cross-country and time series data. The IIIM offers policymakers, regulators and Islamic financial institutions a methodological framework for quantifying, observing and enhancing the actual effects of ISF initiatives. It enables evidence-based decision making, prioritises programmes, and aligns Islamic finance with national development plans and international standards of sustainability.

This paper evaluates the effectiveness of Shariah Supervisory Committees (SSCs) in Islamic Banks and Finance Companies (IBFCs) in Bangladesh, including full-fledged Islamic banks as well as Islamic branches and windows of conventional banks. SSCs are mandated to ensure Shariah compliance; however, recent crises among several IBFCs have raised questions about whether they are effectively fulfilling this role. Using content analysis of regulatory requirements from Bangladesh Bank and semi-structured interviews with SSC members, boards of directors (BoD), Shariah secretariat officials, senior bankers, and regulators, the study benchmarks practices against international standards (AAOIFI and IFSB) and triangulates findings with feedback from seminars and peer discussions. The research focuses on SSC composition, independence, meeting frequency, Shariah audit coverage, remuneration, disclosure practices, and member contributions. It finds that while SSCs are formally embedded in governance structures, significant variations and challenges persist, including limited independence and weak deliberations and disclosures. Theoretically, the study contributes by applying agency theory and institutional theory to explain how board oversight, independence, and regulatory pressures shape SSC effectiveness. Empirically, it documents gaps that may undermine Shariah compliance and stakeholder trust. Policy recommendations are provided, including independence safeguards, structured remuneration, external Shariah audit, centralized guidance, and Continuous Professional Development (CPD), to align Shariah governance of IBFCs in Bangladesh with international best practices and strengthen their credibility. Given the evolving nature of the Shariah governance framework (SGF) in Bangladesh, the data collection, findings, and analysis reflect the institutional and regulatory context up to March 10, 2025.

This study evaluates the rationale for introducing Islamic Banking Windows (IBWs) in Bangladesh, particularly in light of governance failures, high levels of non-performing investments, and the reputational damage suffered by several full fledged Islamic banks. It also examines the sources of scepticism surrounding IBWs and provides practical recommendations to enhance their credibility and institutional strength. The study adopts a qualitative methodology, combining content analysis, semi-structured interviews, and focus group discussions (FGDs). This triangulated approach strengthens the findings by cross-validating evidence from multiple sources. The findings suggest that, although IBWs often face scepticism, they play a critical role in providing credible Islamic banking alternatives, especially during periods when full-fledged Islamic banks are in crisis. The study further identifies key operational and regulatory challenges affecting IBWs that must be addressed to ensure their effective functioning and support the orderly development of the Islamic banking sector. It systematically analyses the rationale, regulatory landscape, and operational dynamics of IBWs in Bangladesh. Drawing on the perspectives of those directly involved in IBWs, the study captures real-world practices and constraints, formulates recommendations grounded in practical realities, and brings practical insights to the Islamic finance literature. The findings and recommendations are relevant not only to Bangladesh but also to other jurisdictions where Islamic banking is emerging and conventional banks are considering establishing IBWs.

This paper aims to portray the publication pattern, key themes, study trends and future directions for the studies on ethics in Islamic finance. A total of 194 published documents that includes journal articles, books and book chapters and conference proceedings were screened for the period 1988 to August 2022 and categorized based on designated sectors of the Islamic finance industry. This paper also highlights the change in research trends in all three sectors of Islamic finance and suggests possible areas for future research. A comprehensive systematic literature review was conducted using the �advanced search� function of �google scholar� by using the option �find articles� with the keywords �Ethic (s/al)�, �Islamic banks�, �Islamic banking�, �Islamic finance�, �Islamic capital markets� Takaful, Islamic insurance without restricting the time frame, author list and the platform. Furthermore, the search for relevant articles was conducted on other mainstream index databases such as �Web of Science� and �Scopus�. Among the highlights of the findings were an increase in publications on ethical issues after the global financial crisis and an increase in publications in high-impact mainstream business and finance journals. A higher number of studies were documented in the area of Islamic banking and finance followed by Islamic capital markets and Islamic insurance/Takaful. Although a greater number of empirical studies were published than conceptual studies, dominance was resulted due to the replication of the studies in various jurisdictions based on the same concepts or models rather than applying diversified concepts in various jurisdictions. This study contributes to the growing literature on ethical and/or Islamic finance as a guide for researchers to identify research gaps and provides a systematic direction for future studies in the area of ethics in Islamic finance.