The development and competitiveness of Islamic banking, as a relatively young segment of the global financial market, is conditioned, first of all, by the trust of current and potential investors in ...the ability of Islamic banks to manage entrusted funds by the contract and good business practice. Deposit insurance is one of the important instruments that can be used to strengthen depositors' confidence in the banking system's stability. This paper analyzes the model of Islamic deposit insurance. The paper's objectives are to review its theoretical basis and the features of its practice, possible deviations of business practice from theoretical postulates, and the challenges of applying Islamic deposit insurance in different legal systems. Analyzing the practice of Islamic deposit insurance, it concludes that in most countries it deviates from the Shariah-compliant model of deposit insurance. This was primarily contributed by banking regulations that generally do not recognize the specificity of an Islamic bank's relationship with its depositors and, therefore, the Islamic banks' need for an authentic approach to deposit insurance.
Deposit insurance has become an integral element of the modern banking system, which contributes to the safety of depositors and the business stability of banks. This paper analyzes the conventional ...and Shariah approach to deposit insurance. The paper aims to consider the features of the conventional and Shariah approach to deposit insurance, including their similarities and differences. Based on the analysis of the mentioned approaches and considering their functions in the banking system, it can be concluded that the Islamic deposit insurance model, created in accordance with Shariah principles, and the conventional deposit insurance model do not differ significantly. The difference is primarily reflected in the fact that the conventional insurance model contains certain Shariah-prohibited elements, which come to the fore in financing the deposit insurance system and investing available surplus funds.
The willingness of creditors to satisfy the credit demand of the population and the economy under mutually acceptable conditions directly depends on the degree of legal protection enjoyed by ...creditors. In this paper, we deal with the protection of creditors' rights and the instruments used for this purpose. The aim of this paper is to consider the economic effects arising as a result of the application of instruments of creditors' rights protection, which affect not only the financial position of creditors and debtors but also the stability and efficiency of the financial and economic system as a whole. The research results show that the existence of an adequate level of protection of creditors' rights has a strong positive impact on the size and activity of the credit market. On the other hand, the application of various instruments of creditors' rights protection can cause both positive and negative effects on the creditors position. Yet, an excessively high level of creditors' protection can significantly worsen the position of debtors and, consequently, aggravate the position of creditors in the long run.
Research Question: This paper analyses whether a relationship exists between the financial policy of the companies, embodied in the structure of assets and liabilities, and their financial health ...during the COVID-19 pandemic. Motivation: The paper aims to consider the impact of changes in the value of individual items of the balance sheet of selected companies on the movement of profitability, liquidity, and market value of companies, as measures of the companies’ financial health. Idea: The core idea of this paper was to empirically evaluate the financial health of domestic companies, where the financial policy that the selected companies implemented was taken as a factor of financial health. The financial policy was viewed through the structure of assets and financing of the chosen companies, while financial resilience observation was based on indicators of profitability, liquidity, and market value of the companies. Data: Secondary data from the reference database (Index of the Belgrade Stock Exchange) during the period 2016-2020, which includes 30 companies from the real sector, serve as the relevant basis for the realization of the research within the adequately set area of the research. Tools will be used to study the relationship, i.e., connectivity of selected research variables based on regression analysis in the frame of parametric quantitative procedures. The financial policy was viewed through the structure of assets and financing of the chosen companies, based on their balance sheets, while financial resilience observation was based on indicators of profitability, liquidity, and market value of the companies, which were used as dependent variables in the research. Findings: The point that changes in a relatively small number of the balance sheet items of selected companies influenced the movement of the mentioned financial health indicators during the COVID-19 pandemic. Contribution: Presented research results are significant and representative for future corporate practice. The key contribution of this research is the identification of assets’ elements with a critical impact on companies’ financial health.
During the centuries of conventional banking practice, a number of credit risk mitigation techniques and instruments have been developed and the process of their evolution, due to constant changes in ...the banking business, is continuing. Islamic banks, however, have not yet managed to develop authentic, Shariah acceptable credit risk management techniques to the extent sufficient to meet their needs. Therefore, they are often forced to use conventional techniques, whose consistent application in Islamic banking, due to the Shariah non-compliance of certain techniques or the way in which they are implemented in conventional banking, is quite limited. In this paper, we will analyze the conventional credit risk management and mitigation techniques and their applicability in Islamic banking, the credit risk management practices in Islamic banks, the achieved results and factors that influence the emergence and intensity of credit risk in Islamic banking.
With the goal of stabilizing the banking system at the national and global level and preventing the devastating crises that very swiftly spill over from the financial into the real sector, the Basel ...standards of capital adequacy and risk management have been adopted and implemented in the original or slightly altered form in many countries. The increasing presence and significance of Islamic banks demand more attention of the professional public focused on all of the business aspects of these financial institutions. One of the key aspects of Islamic bank business is efficiency in maintaining the adequate capital level and risk management. Considering the uniqueness of Islamic financial intermediation and businesses conducted by Islamic banks, the question is raised whether the Basel regulations and practices of conventional banks in capital and risk management are applicable in the Islamic banks. It this paper we will analyze the possibilities of Islamic banks to, apply the Basel standards without deviating from the basic Sharia principles in the process of structuring their capital, monitoring their capital adequacy ratios, and reporting on their success in capital and risk management.
Thanks to their role as creators and implementers of monetary policy, central banks in most modern countries have the status of key financial institutions and pivots of financial system stability. ...During the centuries of evolution of central banking, numerous models and instruments of monetary policy were developed, the application of which depended largely on the political environment and the dominant economic model in specific countries. Unlike conventional central banking, Islamic central banking has been in global economic practice for only a few decades. An authentic and Shariah-compliant model of Islamic central banking is still in its infancy. Therefore, the practice of Islamic central banking is largely based on the application of instruments of conventional central banking, which, according to Shariah compliance, are used in their original or modified form or are excluded from use. In this paper, we will present the development path of Islamic central banking, the goals and obligations of Islamic central banks, a set of Shariah-compliant monetary policy instruments, the practice of Islamic central banking in certain countries, and limitations for the efficient functioning of Islamic central banks in practice.
From a theoretical point of view, there are certain similarities between Islamic banks and conventional mutual funds, particularly in terms of the fundraising methods. In the paper, we tested that ...similarity from the practical aspect. A special emphasis is on the advantages and disadvantages of the previously mentioned financial institutions investors' status. The aim of this study is to compare Islamic banks with generally known conventional financial institutions, such as mutual funds, and, in that way, enable the readers a better understanding of the Islamic banking concept, which is still relatively or completely unknown to the domestic public. The research is based on the comparative method by which we compared the investor's status in Islamic banks and their status in mutual funds. The significance of this paper's conclusions is reflected in the fact that readers are given a good basis to regard Islamic banks, whose arrival in Serbia can be expected in the foreseeable future, objectively, taking into consideration primarily the economic principles, benefits and problems of cooperation with Islamic banks.
The subject of this article is the concept of venture capital, one of the most attractive model of financial intermediation in the modern business environment. The paper will first present the ...concept of venture capital, its presence on a global level, the form in which it occurs and stages of this type of investment. Then it will be analyzed the challenges related to the implementation of this financial arrangement, especially in the transition countries. The aim of the research is to look at the key features of venture capital and the possibility of its implementation in different social and economic conditions, given the obstacles faced by the venture capital investors.
Islam attaches great importance to insurance, as an instrument of protection of the individual and the community, and considers it an indispensable element of the process of achieving socio-economic ...justice in society. Consequently, in the Islamic concept of insurance, the social component dominates over the commercial component. However, requirements of the modern environment have made it necessary to have Shariah-acceptable commercial insurance. Given that conventional insurance models are largely Shariah non-compliant, Takaful insurance has been developed to meet the needs of individuals and institutions that want to be insured in accordance with Shariah principles. In this paper, we will analyze the process of evolution of Takaful insurance, its types and models, perform a comparative analysis of Takaful and conventional insurance, reviewing arguments in favor of Shariah specific nature of conventional insurance, and finally, list the challenges of implementing Takaful insurance in practice.