Journal of Islamic Business and Management

NLP, Sharīʿah Governance, and the Future of Islamic Finance: A Regulatory Imperative

2026-06-30T06:23:44+00:00

The rapid emergence of Artificial Intelligence (AI), particularly Natural Language Processing (NLP) and Large Language Models (LLMs), is reshaping the global financial industry, and Islamic finance is gradually entering this technological phase. AI-assisted systems are increasingly being used for customer interaction, contract analysis, document classification, sharīʿah screening, summarization of fatāwa, compliance review, and support for sharīʿah audit functions (Jokhio and Jaffer, 2024).

The broader use of AI-supported customer interaction systems among the gulf Islamic banks, including Dubai Islamic Bank,Abu Dhabi Islamic Bank, and Kuwait Finance House has been highlighted in contemporary literature on AI in Islamic banking and digital financial services. Recent studies note the increasing deployment of multilingual AI chatbots, virtual assistants, and machine-learning-supported customer-service systems to facilitate banking assistance, enhance customer experience, and improve self-service support mechanisms (Hasan et al., 2022; Jan et al., 2023; IFSB, 2024).

Conceptualizing a Competence Model: An Islamic Perspective

2026-01-06T06:58:40+00:00

Purpose: This article proposes a novel conceptual model of human competence anchored in Islamic work contexts. It aims to reconceptualize competence by integrating Qur'anic spiritual and ethical constructs, thereby extending conventional competence frameworks.Design/Methodology/Approach: The study adopts a conceptual

and interpretive approach based on an in-depth analysis of primary Islamic sources namely the Qur'an and the Sunna supported by classical Islamic scholarship and contemporary academic literature in Islamic management and human resource management. Findings: The article develops an integrated Islamic competence model composed of six interrelated constructs: khilafa (vicegerency), ilm (beneficial knowledge and skills), amana (trusteeship and responsibility), ihsan (excellence), ibada (worship), and falah (ultimate success). The findings demonstrate that competence, within the Islamic worldview, extends beyond technical and behavioral proficiency to include inner spiritual dispositions and ethical accountability, oriented toward both effective performance in worldly life and success in the hereafter.

Originality/Value:

This study offers an original contribution by reconceptualizing human competence through an explicitly Islamic spiritual-ethical lens, addressing a notable gap in Islamic human resource management literature.

Implications:

The proposed model provides a conceptual foundation for future empirical research on competence development, performance, and ethical behavior in Islamic organizational settings. The model offers practical guidance for designing HRM practices such as recruitment, training, performance evaluation, and leadership development that align organizational effectiveness with Islamic ethical and spiritual values.

A Critical Analysis of Profit Distribution Practices by Islamic Banks in Pakistan

2026-04-13T11:03:29+00:00

This paper critically evaluates profit distribution practices of Islamic banking institutions (IBIs) in Pakistan for the period of 2015–2024. In this context, the State Bank of Pakistan (SBP) issued in 2012 a circular aimed at strengthening transparency and standardization in profit-sharing mechanism adopted by the IBIs. It is also to empirically evaluate the outcomes profit-sharing regrading implications for enhancing equitable justice in the economy. The study also addresses the underlying issue by gathering the opinion of different stakeholders through qualitative methods (expert interviews with Shariah advisors, bankers and regulators, and a structured questionnaire on pool management, profit and loss sharing mechanism, issues related to Hiba distribution and assigning weightages). For quantitative investigation of published financial data to analyse the profit-sharing ratios, Hiba disbursement, and pool management, it used several statistical tests such as ANOVA, paired t-test, and Levene’s test.

Socio Economic Determinants of Customer's Default Risk Assessing the Islamic Consumer Portfolio's Credit Factors in the Public Sector Bank: A Case Study

2026-04-13T04:49:50+00:00

Purpose: This study investigates the effects of borrower-specific characteristics such as education, occupation, employment duration, and socioeconomic status on default risk in a public sector bank in Pakistan. The study also assesses the effectiveness of the Consumer Risk Rating (CRR) system in predicting customer defaults.Design/Methodology/Approach: The research is quantitative in nature and is applied to a case study of 100 cases drawn from 2,076 consumer financing accounts in a public-sector bank. Descriptive

statistics, correlation analysis, linear regression, and probit models were used for data analysis.

Findings: The study found that borrower education, occupation, and job tenure significantly influenced CRR ratings and default risk. However, other factors such as gender, marital status, and income did not significantly affect the default probability. The CRR system appeared to be a useful predictor of customer default; higher scores corresponded to lower risk.

Originality: This research contributes to the literature on Islamic banking by incorporating socio-economic characteristics in credit risk models, which has not been considered by previous studies. The results of this study provide empirical evidence from an Islamic banking perspective, which provides practical insights for enhancing risk management in consumer finance.

Implications: These findings suggest that Islamic banks need to improve their credit risk model by including socioeconomic factors for their borrowers to improve credit risk management and predict borrower default more accurately. This study offers practical implications for Islamic bank regulators and managers to enhance their risk assessment processes.

Sustainable Consumption and Moral Marketing: Religiosity, Green Campus Climate, and Food Waste Reduction among University Students

2025-10-24T06:38:35+00:00

Food waste is a global sustainability challenge with profound environmental, social, and economic consequences. Despite its significance, research on food waste in higher education institutions (HEIs) remains limited, particularly in developing countries. This study extends the Value-Belief-Norm (VBN) framework to examine food waste reduction behavior (FWRB) among university students in Pakistan. Religiosity is incorporated as an antecedent of environmental values, reflecting the role of Islamic teachings in shaping ecological concern, while Green Campus Climate (GCC) is introduced as a moderator that reinforces the translation of personal norms into behavior. Data were collected through an online survey, yielding 488 valid responses from students across public and private universities. Results from PLS-SEM confirm the sequential VBN pathway and show that religiosity significantly predicts environmental values, while GCC strengthens the link between personal norms and FWRB. The study broadens and deepens VBN theory and offers practical insights for universities and policymakers to cultivate sustainable food practices.

Harmony in the Workplace: Examining how Islamic Work Ethics Moderates the Link between Job Stress and Job Performance in the Information Technology Field

2026-05-10T14:37:57+00:00

Purpose: This study investigates the impact of job stress and Islamic Work Ethics (IWE) on employee job performance within the IT sector of Pakistan, evaluating if IWE serves as a sociospiritual resource to buffer stress-induced performance decrements Methods: Data were collected from 356 professional employees across 54 Pakistani IT firms using structured questionnaires. Using purposive sampling, constructs were operationalized via validated scales from Parker and DeCotiis (1983), Wayne and Ferris (1990), and Ali (1992). Hypotheses were tested using OLS moderated regression analysis in SPSS.

Findings: Results reveal that job stress significantly impairs job performance while IWE exerts a powerful positive direct effect. Crucially, IWE strongly moderates the stress-performance link. High-IWE individuals maintain elevated task performance even under intense occupational strain, completely neutralizing the negative effects of distress.

Significance: This study contextualizes Conservation of Resources (COR) theory within a non-Western religious paradigm. It demonstrates that culturally embedded moral frameworks act as vital personal resources that protect cognitive capacity and block burnout in high-tech environments.

Implications: IT managers can optimize workforce resilience and protect productivity by embedding IWE dimensions into corporate policies and training assets. However, spiritual coping mechanisms must be paired with structural stress-reduction remedies, such as role clarification, to eliminate baseline operational exhaustion.