Corporate Governance and IFSB Standard-4:Evidence from Islamic Banks in Bangladesh

Purpose: This paper aims to examine the compliance status of Islamic banks in Bangladesh with Shari’ah-based accounting standards named Islamic Financial Services Board (IFSB) standard-4 and its association with corporate governance. Design/methodology/approach: The six years of secondary data, including the annual reports of 2013–2018, were collected from the websites of all the seven listed Islamic banks, i.e. 100% of the population available during the period of study. The study used a content analysis approach for systematically categorizing and analysing the contents disclosed in the annual report. A total compliance score based on 133 reporting items of IFSB standard-4 were considered for content analysis. Furthermore, this study applied the ordinary least square to investigate the impact of corporate governance on IFSB standard-4. Findings: This study found that the level of compliance with the IFSB standard by the Islamic banks in Bangladesh is poor, as the overall compliance status is 44.83%. Further, this study observed a significant and positive influence of the Shari’ah supervisory committee, the board size, accounting experts on the board, foreign ownership and institutional ownership on the level of compliance with IFSB standard-4. On the other hand, this study found a negative effect of directors’ ownership on the level of compliance with IFSB standard-4. Practical implications: This study provides the management of Islamic banks an insight into developing their governance characteristics to comply with Islamic accounting and reporting standards. Moreover, this study expects to facilitate the management of Islamic banks in designing their accounting and reporting outlines to enhance the level of compliance with the IFSB standards. Originality/value: This pioneering study on IFSB standards opens an avenue to the researchers exploring the accounting and reporting status of Islamic banks considering the requirements of the IFSB standards.</p

Whether Shari’ah compliance efficiency is a matter for the financial performance:The case of Islami Bank Bangladesh Limited

Purpose- Shari`ah is the foundation of Islamic banks. Though all the Islamic banks required complying the Shari`ah requirements fully but the level of compliance differs among the Islamic banks. At the same time, Islamic banks have been performing well, but all of them are not demonstrating similar financial performance. This paper endeavored to explore whether Shari`ah compliance efficiency makes any difference in financial performance of Islami Bank Bangladesh Limited (IBBL). Design/ methodology/approach- This study used IBBL as a case. For exploring the issue of study, this paper applied e-mail interview approach and interviewed 24 interviewees including financial analyst, IBBL clients, and executives of regulatory bodies, IBBL, other Islamic and interest-based traditional banks. Interview opinions are then analyzed and interpreted for a deeper understanding of the topic. Findings- The study observed that some other factors have influences on the financial performance of IBBL, but the level of Shari`ah compliance is the dominant instinct in acquiring leading position. Superior Shari`ah compliance creates lots of internal strengths and external opportunities that facilitate IBBL in achieving loftier financial performance. Most of the interviewees argued that Shari`ah be the only disposition that makes IBBL unique. Moreover, the bank that follows more Shari`ah gets better financial outcomes. Research limitations- The study used a qualitative method using interview responses only for evaluating the relationship between Shari’ah compliance and financial performance. Further study may be conducted based on quantitative approach. Social implications- This paper expects to uphold the significance of Shari`ah in swelling the financial performance of IBBL and simultaneously motivating the parties relating to Islamic banks in enhancing the level of Shari`ah compliance. Moreover, this study provides new insights into the important of Islamic banks and their performance in relation to the choice of customers. Originality/value- This study explores the significance of Shari`ah compliance in creating avenues for greater financial performance and develops a model showing the ways how Shari`ah compliance leads Islamic banks in achieving the haughtier financial position

Comparative compliance status of AAOIFI and IFSB standards:An empirical evidence from Islami Bank Bangladesh Limited

Purpose: This paper aimed at examining the compliance status of AAOIFI FAS-1 and IFSB Standard-4 by Islami Bank Bangladesh Limited (IBBL), recognizing the regulatory influence for complying with AAOIFI and IFSB standards and identifying the factors influencing the compliance with these standards. Design/methodology/approach: The present study used content analysis approach for investigating the compliance status. The study considered IBBL as the only sample because it is the only Islamic bank in Bangladesh which is the member of both AAOIFI and IFSB. Hence, this paper investigates the compliance status of IBBL as a member of AAOIFI and IFSB. The study examined the annual reports of 2008-2012 as these were the latest and contemporary reports in 2013 when the study was conducted. SPSS software version 22.0 was used to analyse the data. A total of 203 items under 13 categories of AAOIFI standard and 133 items under 17 categories of IFSB standard were considered. OLS was run to test the hypotheses of the study. Findings: The study found that IBBL on an average complied 46.31% of AAOIFI and 52.50% of IFSB standards during the period and importantly, IBBL did not comply some of the categories of required disclosures. The study also observed that size, as measured by total asset and number of branches, has a significant influence on compliance with IFSB standard, but not AAOIFI. The findings of the study depicted that IBBL did not reasonably recognize the importance of complying with AAOIFI and IFSB standards. Poor compliance or non-compliance with AAOIFI and IFSB accounting and reporting standards by IBBL exposed that the bank is not efficient in managing Shari`ah compliance risks, operational risks, and transparent financial reporting. Therefore, recognition of the Shari`ah standards by the respective IFIs and a ‘regulatory push’ is vital for improving the level of compliance with these standards. Research limitations/implications: The study considered IBBL as the only sample of the study because it is the only Islami bank in Bangladesh which holds the membership of both AAOIFI and IFSB. The fiscal years 2008 to 2012 only were selected to evaluate the compliance status of the AAOIFI and IFSB standards in preparation and presentation of the financial statements of IBBL for comparative analysis because IFSB standard for accounting and disclosure was formulated in 2007, hence the study could not evaluate the compliance status before 2008. Practical implications: The study will help IBBL in identifying their limitations in complying AAOIFI and IFSB standards and also the regulators in designing the accounting and reporting frameworks in regulating Islamic banks in Bangladesh. The study would help IBBL in identifying the reasons for non-compliance, how improvement in compliance level may help the bank in mitigating Shari`ah compliance and operational risk and how new legal and institutional framework may improve the level of compliance with those standards. Originality/value: This is a unique study which considered both AAOIFI and IFSB accounting and reporting standards in evaluating the reporting compliance status of an Islamic bank and identified the influence of reporting compliance on managing Shari`ah compliance risks, operational risks, and transparency. This study expects to instigate the Islamic banks in complying accounting and reporting standards for being Shari`ah compliant

Corporate governance and IFSB standard-4: evidence from Islamic banks in Bangladesh

Purpose: This paper aims to examine the compliance status of Islamic banks in Bangladesh with Shari’ah-based accounting standards named Islamic Financial Services Board (IFSB) standard-4 and its association with corporate governance. Design/methodology/approach: The six years of secondary data, including the annual reports of 2013–2018, were collected from the websites of all the seven listed Islamic banks, i.e. 100% of the population available during the period of study. The study used a content analysis approach for systematically categorizing and analysing the contents disclosed in the annual report. A total compliance score based on 133 reporting items of IFSB standard-4 were considered for content analysis. Furthermore, this study applied the ordinary least square to investigate the impact of corporate governance on IFSB standard-4. Findings: This study found that the level of compliance with the IFSB standard by the Islamic banks in Bangladesh is poor, as the overall compliance status is 44.83%. Further, this study observed a significant and positive influence of the Shari’ah supervisory committee, the board size, accounting experts on the board, foreign ownership and institutional ownership on the level of compliance with IFSB standard-4. On the other hand, this study found a negative effect of directors’ ownership on the level of compliance with IFSB standard-4. Practical implications: This study provides the management of Islamic banks an insight into developing their governance characteristics to comply with Islamic accounting and reporting standards. Moreover, this study expects to facilitate the management of Islamic banks in designing their accounting and reporting outlines to enhance the level of compliance with the IFSB standards. Originality/value: This pioneering study on IFSB standards opens an avenue to the researchers exploring the accounting and reporting status of Islamic banks considering the requirements of the IFSB standards.</p

SPATIO-TEMPORAL ANALYSIS OF LAND USE AND LAND COVER CHANGES IN BARGUNA DISTRICT OF BANGLADESH USING REMOTE SENSING TECHNIQUES: FOCUSING ON MANGROVE VEGETATION

Land use and land cover (LULC) change detection using remote sensing techniques is an important and least time-consuming process particularly for combating natural disasters. This study focused on the mapping and analysis of the LULC changes in the Barguna District, Bangladesh for the years 1990, 2000, 2010 and 2017. In this study, data were collected from Landsat 5 TM &amp; 8 OLI_TIRS during the years. Mainly Normalized Difference Vegetation Index (NDVI) was performed for mapping of the different classes (water, residence, agricultural field and mangroves) for each of the mentioned years. It has found that water (­0.86%), agricultural field (­3.63%), mangroves (­9.97%) were increased and residence (↓14.46%)) was decreased from the year 1990 to 2000. However, within the next ten years from 2000 to 2010, it has found that water (­1.05%), residence (­11.48%) were increased and agricultural field (↓7.47%), mangroves (↓5.07%) were decreased that could be the two severe natural disasters in 2007 (the extreme super cyclone Sidr) and 2009 (the cyclone Aila). After that, water (­0.90%), mangroves (­15.45%) were increased and residence (↓7.10%), agricultural field (↓9.24%) were decreased from the year 2010 to 2017. Finally, the overall scenario was observed that water (­2.82%), mangroves (­20.35%) were increased and residence (↓10.08%), agriculture field (↓13.09%) were decreased from the year 1990 to 2017. It has observed that from the year 1990 to 2017, mangroves vegetation were increased from 9.32% to 19.02% which means the government had taken the initiatives to mangroves plantation that indicated around 348.26 km2 afforestation has occurred. These results of the study and developed maps will be favorable for the communal people, relevant departments, national and international planers and the researchers of the community