ABSTRACT
Islamic banks have been serving millions of people in different countries since the 1960s and playing a pioneering role in the development of the Islamic financial sector. Islamic finance’s total global assets exceeded two trillion dollars in 2019 and are expected to continue this growth in the future. Islamic banking is still the main driver of the sector with a 72.4% share, and it is followed by sukuk (22.3%), Islamic funds (4.2%) and Islamic insurance (takaful) (1.1%) (IFSB, 2020). Other Islamic social financial institutions such as Islamic microfinance and zakah funds have minimal shares (~1%) in the entire Islamic finance sector. Although Islamic banks have indicated tremendous growth rates in terms of their asset sizes and operations, the extent to which they fulfil their role in realising the social and developmental goals of Islamic economics has widely been discussed in the literature (for instance Asutay, 2007, 2012). Their position regarding the ideals of Islamic economics has also been investigated through the maqasid framework instead of focusing only on the financial performance of these institutions because the financial aspect is only one dimension of the issue and “social goals are at least as important as making a profit” (Haniffa & Hudaib, 2007, p. 98) when the foundational principles of Islamic economics are taken into account.
