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ABSTRACT. Malaysia has a number of full-fledged Islamic banks including several foreign owned entities of conventional institutions who have established Islamic subsidiaries and also entities who are conducting foreign currency business (Central Bank of Malaysia 2011). Full-fledged Islamic banks can fully orientate all of their activities to the Islamic ideals; while the subsidiary Islamic banks cannot, since they are still a part of their holding banks, i.e. conventional banks. The objectives of this paper are, therefore, to firstly find out if there are such things as shubuhat in Islamic banks, and if there are; to secondly determine relationship between shubuhat and orientation of Islamic bank. A total of 21 Islamic banks in Malaysia representing the whole population were selected. Secondary data was used and sourced from the banks’ 2010 annual report. Using descriptive statistics, the existence and the extent of existence of shubuhat in Islamic banks operating in Malaysia was ascertained. It was found that shubuhat did exist in some Islamic banks, and the full-fledged Islamic banks had lesser shubuhat than the subsidiary Islamic banks. pp. 95–109
JEL codes: E5, G21, G24


Keywords: orientation of bank, doubtful activities (Shubuhat), Islamic banks

ESSIA RIES AHMED
This email address is being protected from spambots. You need JavaScript enabled to view it.
School of Business Innovation
& Technopreneurship
Universiti Malaysia Perlis
SOFRI BIN YAHYA
Graduate School of Business
Universiti Sains Malaysia
MD. AMINUL ISLAM
School of Business Innovation
& Technopreneurship
Universiti Malaysia Perlis

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