Zakat disclosure by Malaysian Islamic Banks

• Published in: International Business Management
• Main Author: Abd Samad K.; Said R.
• Format: Article
• Language: English
• Published: Medwell Journals 2016
• Online Access: https://www.scopus.com/inward/record.uri?eid=2-s2.0-84995485075&doi=10.3923%2fibm.2016.4737.4742&partnerID=40&md5=739a5139cd6e693b7a107ae4d2a05394

This study investigates zakat disclosure on 16 Islamic banks (IB) listed under Bank Negara Malaysia during the year 2014. These are then compared, using a zakat disclosure to improve the element in zakat dimension from ethical identity index and social reporting disclosure. The new elements included are payment of zakat to zakat institutions, zakat as part of CSR program, zakat institution attestation on zakat computation, Shariah Supervisory Board (SSB) attestation that IB is not liable to pay zakat and reasons for not paying zakat. In addition, content analysis is undertaken to measure the volume of zakat disclosures. Based on the results, the overall mean zakat disclosure of IBs is 0.70 and Bank Islam Malaysia Berhad (BIMB), Amlslamic Bank Berhadand Hong Leong Islamic Bank Berhad, scores the highest disclosure of zakat compliance which is 0.80. Five IBs out of twelve surveyed (IB acknowledged the responsibility to pay zakat) to be above average. The remaining seven IBs suffer from the disparity between the communicated and ideal zakat disclosures. The results have important implications for Islamic Banks in order to enrich their images and good reputations in society as well as to remain competitive. © Medwell Journals, 2016.