Interest rate risk management and Islamic Banking: Evidence from Malaysia

The fluctuation of interest rate in the market has let the Islamic banks becoming more cautious and taking a step ahead in managing good risk management practices. This is an important element when a country adapts a dual banking system. The interest rate is obviously prohibited in Islam; however,...

Full description

Bibliographic Details
Main Authors:	Mohd. Israil, Khaliq Ahmad, Mohd Thas Thaker, Hassanudin, Mohd Thas Thaker, Mohd Asmy, Pitchay, Anwar Allah
Format:	Article
Language:	English
Published:	IIUM Institute of Islamic Banking and Finance 2017
Subjects:	HG Finance
Online Access:	http://irep.iium.edu.my/54977/ http://irep.iium.edu.my/54977/ http://irep.iium.edu.my/54977/1/54977_Interest%20rate%20risk%20management%20and%20Islamic%20Banking.pdf

id	iium-54977
recordtype	eprints
spelling	iium-549772019-01-03T05:02:21Z http://irep.iium.edu.my/54977/ Interest rate risk management and Islamic Banking: Evidence from Malaysia Mohd. Israil, Khaliq Ahmad Mohd Thas Thaker, Hassanudin Mohd Thas Thaker, Mohd Asmy Pitchay, Anwar Allah HG Finance The fluctuation of interest rate in the market has let the Islamic banks becoming more cautious and taking a step ahead in managing good risk management practices. This is an important element when a country adapts a dual banking system. The interest rate is obviously prohibited in Islam; however, it does not mean that the Islamic banks will not encounter any risk due to the interest rate fluctuation in the market. This is due to the nature of the Islamic banking balance sheet where it is fixed on asset side whereas in the conventional banking it looks more flexible to the asset, thus putting the Islamic banks unable to react expeditiously to the fluctuation in market interest rate which later leads to greater exposure to the rate of return risk. Therefore, the present study aims to investigate the effect of the interest rate risk towards the portfolios of the Islamic banks operating in the Malaysia. The quantitative result reveals that the majority of the Islamic banks are exposed to the interest rate risk and it is explained by the financial and economic variables. This study is expected to add value to the existing literature in risk management by proposing policy recommendations and methodological innovation. IIUM Institute of Islamic Banking and Finance 2017 Article PeerReviewed application/pdf en http://irep.iium.edu.my/54977/1/54977_Interest%20rate%20risk%20management%20and%20Islamic%20Banking.pdf Mohd. Israil, Khaliq Ahmad and Mohd Thas Thaker, Hassanudin and Mohd Thas Thaker, Mohd Asmy and Pitchay, Anwar Allah (2017) Interest rate risk management and Islamic Banking: Evidence from Malaysia. Journal of Islamic Finance, 6 (1). pp. 16-30. ISSN 2289-2109 E-ISSN 2289-2117 http://10.101.244.45/iiibf-journal/index.php/jif/article/view/161
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HG Finance
spellingShingle	HG Finance Mohd. Israil, Khaliq Ahmad Mohd Thas Thaker, Hassanudin Mohd Thas Thaker, Mohd Asmy Pitchay, Anwar Allah Interest rate risk management and Islamic Banking: Evidence from Malaysia
description	The fluctuation of interest rate in the market has let the Islamic banks becoming more cautious and taking a step ahead in managing good risk management practices. This is an important element when a country adapts a dual banking system. The interest rate is obviously prohibited in Islam; however, it does not mean that the Islamic banks will not encounter any risk due to the interest rate fluctuation in the market. This is due to the nature of the Islamic banking balance sheet where it is fixed on asset side whereas in the conventional banking it looks more flexible to the asset, thus putting the Islamic banks unable to react expeditiously to the fluctuation in market interest rate which later leads to greater exposure to the rate of return risk. Therefore, the present study aims to investigate the effect of the interest rate risk towards the portfolios of the Islamic banks operating in the Malaysia. The quantitative result reveals that the majority of the Islamic banks are exposed to the interest rate risk and it is explained by the financial and economic variables. This study is expected to add value to the existing literature in risk management by proposing policy recommendations and methodological innovation.
format	Article
author	Mohd. Israil, Khaliq Ahmad Mohd Thas Thaker, Hassanudin Mohd Thas Thaker, Mohd Asmy Pitchay, Anwar Allah
author_facet	Mohd. Israil, Khaliq Ahmad Mohd Thas Thaker, Hassanudin Mohd Thas Thaker, Mohd Asmy Pitchay, Anwar Allah
author_sort	Mohd. Israil, Khaliq Ahmad
title	Interest rate risk management and Islamic Banking: Evidence from Malaysia
title_short	Interest rate risk management and Islamic Banking: Evidence from Malaysia
title_full	Interest rate risk management and Islamic Banking: Evidence from Malaysia
title_fullStr	Interest rate risk management and Islamic Banking: Evidence from Malaysia
title_full_unstemmed	Interest rate risk management and Islamic Banking: Evidence from Malaysia
title_sort	interest rate risk management and islamic banking: evidence from malaysia
publisher	IIUM Institute of Islamic Banking and Finance
publishDate	2017
url	http://irep.iium.edu.my/54977/ http://irep.iium.edu.my/54977/ http://irep.iium.edu.my/54977/1/54977_Interest%20rate%20risk%20management%20and%20Islamic%20Banking.pdf
first_indexed	2023-09-18T21:17:43Z
last_indexed	2023-09-18T21:17:43Z
_version_	1777411674777583616

Interest rate risk management and Islamic Banking: Evidence from Malaysia

Similar Items