INTERNATIONAL ISLAMIC BANKS’ POPULARITY AMIDST THE ASEAN ECONOMIC COMMUNITY: INSIGHTS FROM INDONESIA AND MALAYSIA
##plugins.themes.academic_pro.article.sidebar##
Downloads
##plugins.themes.academic_pro.article.main##
Abstract
The establishment of the ASEAN Economic Community (AEC) aimed to achieve regional integration among all ASEAN member states, with particular emphasis on financial integration. Islamic banking is in line with the broader goals of the AEC, as an alternative financial system, helping to build a more resilient and inclusive financial system in the region. Because of this resiliency and inclusiveness, Islamic banks have been encouraged to develop into international banks in the ASEAN region through increasing their assets and earnings. This paper aims to examine the position of International Islamic banks (IIb) in the AEC under its conventional banking services: OCBC Bank from Singapore, Maybank and CIMB Bank from Malaysia. Through the analysis of banking trends, this qualitative study compares the level of popularity of those banks in Indonesia and Malaysia, the two Muslim-majority countries in ASEAN, after the initial establishment of the AEC period in 2016 to 2024. The findings indicated that the most popular Islamic financial services in Malaysia are provided by Maybank, while the most well-known Islamic financial services under IIb in Indonesia are provided by CIMB Bank. This paper provides an overview of the globalisation of IIb in ASEAN and fills a research gap on the development of IIb, particularly within the AEC.
##plugins.themes.academic_pro.article.details##
References
- Abbas, Ahmad, Neks Triani, Wa Ode Rayyani, and Muchriana Muchran. “Earnings Growth, Marketability and the Role of Islamic Financial Literacy and Inclusion in Indonesia.” Journal of Islamic Accounting and Business Research 14, no. 7 (2023): 1088–1105. https://doi.org/10.1108/JIABR-12-2021-0322.
- Aman-Ullah, Attia, and Waqas Mehmood. “Role of Islamic Work Ethics in Shaping Employees’ Behaviour: Evidence from the Banking Sector in Azad Jammu and Kashmir.” Journal of Islamic Accounting and Business Research 14, no. 7 (2023): 1033–47. https://doi.org/I 10.1108/JIABR-12-
- -0309.
- ASEAN. ASEAN Economic Community Blueprint 2025. Jakarta: ASEAN Secretariat, 2015.
- Asian Development Bank. “ASEAN Banking Integration Framework (ABIF).” Money and Finance
- (blog), 2015. https://aric.adb.org/initiative/asean-banking-integration-framework-abif.
- Bawana, Tate Agape. “The Contribution of Profit and Loss Sharing (PLS) Financing for MSMEs of ASEAN Member States in the New Normal Post-Covid 19.” Journal of Global and Area
- Studies(JGA) 5, no. 1 (June 30, 2021): 43–62. https://doi.org/10.31720/JGA.5.1.3.
- Beaupain, Renaud, and Yann Braouezec. “International Banking Regulation and Tier 1 Capital Ratios.
- On the Robustness of the Critical Average Risk Weight Framework.” International Review of Financial Analysis 91 (2023): 103025. https://doi.org/10.1016/j.irfa.2023.103025.
- Birdsall, Nancy, and Liliana Rojas-Suarez. “Regionalism for Financing Development: The Unexploited Potential.” In Financing Development: The Power of Regionalism. Center for Global Development, 2004.
- Brei, Michael, and Goetz Von Peter. “The Distance Effect in Banking and Trade.” Journal of InternationalMoney and Finance 81 (March 2018): 116–37. https://doi.org/10.1016/j.jimonfin.2017.10.002.
- Chowdhury, Mohammad Abdul Matin, and Razali Haron. “The Efficiency of Islamic Banks in the Southeast Asia (SEA) Region.” Future Business Journal 7, no. 1 (December 2021): 16. https://doi.org/10.1186/s43093-021-00062-z.
- CIMB Islamic. “CIMB Islamic History,” 2024. https://www.cimbislamic.com/en/who-we- are/history/2000s.html#:~:text=Our%20History&text=CIMB%20Islamic%20was%20launche d%20by,Malaysia%20on%202nd%20June%202003.&text=A%20Shariah%20unit%20was%20s et%20up%20under%20CIMB%20Niaga%20in%20Indonesia.&text=CIMB%20Islamic%20mer ged%20with%20Commerce%20Tijari%20Bank%20on%206th%20June%202005.
- CIMB Niaga. “CIMB Niaga Annual Report 2017.” Jakarta, Indonesia, 2018.
- CIMB Niaga. “CIMB Niaga Syariah Wins Best Islamic Retail Bank for Priority Banking 2022,” December 14, 2022. https://investor.cimbniaga.co.id/misc/Award-ID.pdf.
- CIMB Niaga. “History of Company,” 2024. https://investor.cimbniaga.co.id/gcg/history.html?lang=id&source=corporate.
- Deng, Yuanyue, and Sijing Li. “Do Global and Local Economic Policy Uncertainties Matter for Systemic Risk in the International Banking System.” Finance Research Letters 59 (2023): 104752. https://doi.org/10.1016/j.frl.2023.104752.
- Fakhfekh, M, N Hachicha, F Jawadi, N Selmi, and A. Idi Cheffou. “Measuring Volatility Persistence for Conventional and Islamic Banks: An FI-EGARCH Approach.” Emerging Markets Review 27, no. C (2016): 84–99. https://doi.org/10.1016/j.ememar.2016.03.004.
- Fillat, José L., Stefania Garetto, and Arthur V. Corea-Smith. “Global Banking and the International Transmission of Shocks: A Quantitative Analysis.” Journal of International Economics 145 (November 2023): 103808. https://doi.org/10.1016/j.jinteco.2023.103808.
- Forbes. “Largest Southeast Asian Banks by Overall.” The Global 2000 (blog), 2023. https://www.forbes.com/lists/global2000/?sh=31f9cf8d5ac0.
- Frihatni, Andi Ayu, Abdul Hamid Habbe, Syarifuddin Rasyid, and Nadhirah Nagu. “The Impact of Islamic Banks’ Resilience and Culture on Market Share: Evidence from Muslim Countries in MENA and ASEAN.” International Journal of Innovative Research and Scientific Studies 6, no. 4 (November 27, 2023): 1041–49. https://doi.org/10.53894/ijirss.v6i4.2396.
- Ghossoub, Edgar A. “Economic Growth, Inflation, and Banking Sector Competition.” Economic Modelling 129 (December 2023): 106528. https://doi.org/10.1016/j.econmod.2023.106528.
- Haddou, Samira, and Sawssen Mkhinini. “Investigating the Linkage Between Shariah Board Size, Liquidity Risk and Bank Stability Through an Asymmetric Lens.” Journal of Islamic Accounting and Business Research 14, no. 4 (2023): 652–74. http://dx.doi.org/10.1108/JIABR-03-2022-0074.
- Hamid, Mohd Suhaimi Abdul. “The Future Is Bright for Islamic Banking in ASEAN,” 2022. https://www.sc.com/en/news/the-future-is-bright-for-islamic-banking-in-asean/.
- Haqqi, Abdurrahman Raden Aji. “Regulatory Regimes of Islamic Banking in ASEAN Economic Community (AEC): A Uniting Force in the Industry of the Region.” Advances in Social Sciences Research Journal 4, no. 13 (July 25, 2017). https://doi.org/10.14738/assrj.413.3368.
- Iqbal, Muhammad, Hadri Kusuma, and Sunaryati Sunaryati. “Vulnerability of Islamic Banking in ASEAN.” Islamic Economic Studies 29, no. 2 (July 25, 2022): 159–68. https://doi.org/10.1108/IES-10-2021-0040.
- Ishikawa, Koichi. “The ASEAN Economic Community and ASEAN Economic Integration.” Journal of Contemporary East Asia Studies 10, no. 1 (January 2, 2021): 24–41. https://doi.org/10.1080/24761028.2021.1891702.
- Kim, Dong-Hun, and Sunwoo Paek. “Does Regionalism Matter? Local Politics and Foreign Direct Investment in South Korea.” Asian Education and Development Studies 8, no. 3 (July 8, 2019): 295–
- https://doi.org/10.1108/AEDS-02-2018-0041.
- Lin, Li-Yin, Atina Husnayain, Yi-Tui Chen, and Chao-Yang Kuo. “The Association between Interest of Nutritional Supplements and COVID-19 Pandemic - Evidence from Google Trends.” BMC Public Health 24, no. 1 (January 6, 2024): 109. https://doi.org/10.1186/s12889-023-17607-2.
- Maybank. “Maybank Sustainability Report 2022.” Kuala Lumpur, Malaysia, 2023. Maybank Indonesia. “Maybank Islamic Overview,” 2022.
- https://www.maybank.com/islamic/en/global/regional_presence/indonesia.page?#:~:text=P T%20Bank%20Maybank%20Syariah%20Indonesia,joint%20venture%20bank%20in%20Indonesia.
- Maybank Islamic. “Maybank Group Islamic Bank,” 2022. https://www.maybank.com/islamic/en/about-us/about_maybank_islamic.page?
- Menon, Jayant. “Using Regionalism for Globalisation: The ASEAN Way.” Economics Working Paper.
- Singapore: ISEAS, 2021.
- Nasution, Dedy Darmawan. “Winning the ASR 2023 Best MSME Financing Award, This Is CIMB Niaga Syariah’s Move,” January 12, 2023. https://sharia.republika.co.id/berita/s4zmno457/sabet-penghargaan-pembiayaan-umkm- terbaik-asr-2023-ini-jurus-cimb-niaga-syariah.
- OCBC. “Celebrating Its 11th Anniversary, Bank OCBC NISP’s Sharia Business Unit Strengthens Its Digital Services for Customer Convenience,” 2020. https://www.ocbc.id/en/tentang-ocbc- nisp/informasi/siaran-pers/2020/10/16/milad-11-ocbc-syariah.
- OCBC Malaysia. “OCBC Malaysia and OCBC Al-Amin,” 2024. https://www.ocbc.com.my/group/about-us/group- business#:~:text=OCBC%20Malaysia%20and%20OCBC%20Al%2DAmin&text=After%20be ing%20actively%20involved%20in,Berhad%2C%20on%201%20December%202008.
- Pezzino, Salvatore, Maria Sofia, Chiara Mazzone, Giorgia Litrico, Marcello Agosta, Gaetano La Greca, and Saverio Latteri. “Exploring Public Interest in Gut Microbiome Dysbiosis, NAFLD, and Probiotics Using Google Trends.” Scientific Reports 14, no. 1 (January 8, 2024): 799. https://doi.org/10.1038/s41598-023-50190-5.
- Roussakis, Emmanuel N. Basics of International Banking. XanEdu, 2017.
- Solihin, Solihin, Noer Azam Achsani, and Imam T Saptono. “The Islamic Banking and The Economic Integration in ASEAN.” Buletin Ekonomi Moneter dan Perbankan 19, no. 1 (September 30, 2016):81–106. https://doi.org/10.21098/bemp.v19i1.601.
- Suk-Joong, Kim. “International Banking: Functions, Theories, and Types.” In International Banking: A Functional Approach. World Scientific Publishing Co. Pte. Ltd., 2023.
- Taufik, Muhammad, Rifqi Muhammad, and Peni Nugraheni. “Determinants and Consequences of Maqashid Sharia Performance: Evidence from Islamic Banks in Indonesia and Malaysia.” Journal of Islamic Accounting and Business Research 14, no. 8 (2023): 1426–50. http://dx.doi.org/10.1108/JIABR-07-2021-0205.
- Tschoegl, Adrian E. “International Banking Centers, Geography, and Foreign Banks.” Financial Markets, Institutions & Instruments 9, no. 1 (February 2000): 1–32. https://doi.org/10.1111/1468-
- 00034.
- Yamanaka, Takashi. “Integration of the ASEAN Banking Sector.” Tokyo, Japan: Institute for International Monetary Affairs, 2014.
- Zürn, Michael, and Niels Lange. Regionalism in the Age of Globalization. 1999.
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.