Beliefs And Accountability In An Islamic Bank

An Islamic bank in Malaysia (Malpha) positions itself on being Islamic. The products and services are more expensive while employees are paid less than normal commercial banks. What bonds customers and employees to the bank are symbols of Islam: aqad (oral agreement between the bank and a customer), doa’ (supplication, a prayer), the tazkirah (short religious talks at the morning meeting) and zakat (or almsgiving). Bank Malpha uses aqad (oral agreement between the bank and a customer) and Doa (supplication, a prayer) to form the basis of belief systems that influence the relationship with a customer. With regard to intermediaries, reciprocity (a form of trust) underpins the relationship between the bank and its intermediaries (housing developers and lawyers for example). This bonding is reinforced by a boundary system: the shariah committee. The shariah committee assesses the shariah (lawful according Islam) compliance and also engages with employees regarding shariah issues. This promotes learning through words and dialogue. However there is little documentation on customer recovery. If indeed non-performing loans are a key performance indicator for this Islamic bank, the challenge for this Islamic bank is to identify key processes to manage customer recovery.