Examining Islamic banks performance through CSR, Shariah Audit and Regulatory Compliance: An empirical Assessment

Abstract

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The current research attempted to  investigate  the  role  of Shariah Audit, corporate social responsibility (CSR), and regulatory compliance on islamic banks  performance.  The current  research  investigated  the  employees of Islamic banks in Pakistan who comprised the  sample  population. Using a structured questionnaire, the data was collected from 316  individuals  selected through convenience sampling.  The data was analyzed using SPSS software.  Various  statistical  approaches  including  descriptive  statistics,  reliability  analysis,  correlation,  and  regression  analysis  were  used  for  analysis. The current research indicated that corporate social responsibility, Sharia audits, and Sharia compliance carried a significant impact on the performance of  Islamic  banks.  The introduction  of  external  religious  auditors in  order  to ensure Shariah  compliance  is  advocated,  which  may provide  the  much-needed  incentive  to  enhance  governance  and  boost  market with stakeholder trust. This study contributes to the development of policies pertaining to a better comprehension of the spread of CSR practices and the veracity of CSR reporting by Islamic banks in developing countries. This research comprises a significant addition to the academic literature on selected variables from the perspective of a developing country where CSR efforts are backed  by  the  Islamic  banking  system.  Additionally,  the  assessment   of   the   validity   of   CSR   disclosures   clarifies   the   social   responsibilities  of  business  organizations  towards  their  stakeholders  and  society. This  inquiry  was  conducted to  identify  and  draw  attention  to  the  factors that influence the performance of Islamic banks in Pakistan. It would provide Islamic bankers, policymakers, and other stakeholders  with fresh insights that would strengthen their understanding of the topic.