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Green Banking Performance in Indonesian and Malaysian Islamic Banks: A Maqasid Shariah Framework Fairuz Fasyah Salsabila1.
Fitriyah2 Universitas Islam Negeri Maulana Malik Ibrahim Malang.
Indonesia1,2 220501110170@student.
uin-malang.
id, fitriyah@manajemen.
uin-malang.
https://doi.
org/10.
46367/jps.
Received: March 1, 2026 Revised: March 10, 2026 Accepted: Apr 15, 2026 Published: Apr 30 , 2026 Abstract Purpose Ae This study analyzes the performance of green banking in Islamic banking in Indonesia and Malaysia using the maqasid al-Shariah framework.
Method Ae This study is a quantitative study.
The sampling technique used is purposive sampling, yielding a sample of 21 banks, which includes 11 Indonesian Islamic banks and 10 Malaysian Islamic banks.
The data source is secondary, consisting of annual financial reports of Islamic banks from 2022 to 2024.
The data analysis technique uses the maqasid al-Shariah Index approach and the Simple Additive Weighting method.
The difference in performance between the two countries is tested using an independent samples t-test in SPSS.
Findings Ae The results of this study indicate a significant difference in the green banking performance of Islamic banks in Indonesia and Malaysia, as measured by the maqasid al-Shariah index.
Implications Ae This study can provide insights and contribute to the literature on green finance performance within the maqasid alShariah framework, particularly in the banking sectors of Indonesia and Malaysia.
This study implies that Malaysian Islamic banks need to improve their preserving faith, preserving self, preserving intellect, preserving posterity, and preserving wealth dimensions, in which Indonesian Islamic banks have demonstrated relatively superior performance, thereby aligning better with maqasid al-Shariah.
This study can serve as a guide for Islamic banks in Indonesia and Malaysia to understand the extent to which green banking performance contributes to achieving sustainability and social welfare goals and provide recommendations for improving green finance.
Keywords: green banking, maqasid al-Shariah index, islamic finance Introduction Currently, the Earth's environment is facing a worsening crisis.
Deforestation, air and water pollution, climate change, global warming, and loss of biodiversity are indicators that human activity has exceeded the planet's capacity.
According to a report from the Intergovernmental Panel on Climate Change (IPCC 2.
, with global warming of 2AC, extreme heat will more frequently reach critical tolerance thresholds for agriculture and health.
The adverse effects of the global climate crisis on human health and well-being will worsen as the crisis intensifies, requiring sustainable development efforts from all sectors to support environmental conservation.
Sustainable development is a concept that emphasizes the balance between human needs and environmental sustainability to achieve long-term The first principle that underpins sustainable development is environmental The Intergovernmental Panel on Climate Change emphasizes the importance of swift, sustained action to reduce emissions and adapt to climate change to avoid more severe pISSN 2721-6241 eISSN 2721-7094 https://ejournal.
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consequences in the future.
To that end, sustainable development has become a global framework that encourages all sectors, including the financial sector, to transform towards a greener and fairer future (Ramadhan et al.
The financial sector plays a crucial role in allocating capital and managing risk, presenting significant opportunities to advance the transition toward a more sustainable economy.
In this era of rapid technological development, the growth of financial institutions such as banks has become a benchmark.
This will affect a country's economic growth.
The more developed a banking system is, the more developed the country's economy will be (Fitriyah et al.
Banks play an important role because, as intermediary institutions, the public funds they collect are returned in the form of financing products such as mudarabah financing, musharakah financing, and others (Pratama and Oktaviana 2.
In addition, the most important foundation in banking is trust, both in collecting and distributing funds (Febrin and Sulhan 2.
This financing and fund distribution can be among the efforts of Islamic banks to support the green economy.
According to the Organisation for Economic Co-operation and Development (OECD), financial institutions are important actors in the transition to a low-carbon economy (OECD 2.
If sustainability principles are not internalized in the financial system, it will be difficult for countries to achieve their climate targets.
Conversely, when banks begin to adopt green finance principles, they can become catalysts for significant change in promoting a green and inclusive economy.
The concrete application of the green finance principle in Islamic banking is green banking.
If green finance encompasses all financial instruments that support sustainability, then green banking is its manifestation in the form of environmentally friendly bank policies, operations, and Banks have a responsibility not only as financial institutions, but also as agents of change that can encourage more sustainable business practices.
Green banking is a banking strategy that focuses on environmental sustainability through environmentally friendly policies and operations (Safira and Fasa 2.
Indonesia and Malaysia are also not lagging in adopting green banking policies.
Otoritas Jasa Keuangan (OJK) has developed a second-phase sustainable finance roadmap .
that requires all banks to develop sustainable finance action plans.
The OJK has mandated financial service industry players to prepare reports detailing the implementation of environmental, social, and governance principles in their business strategies, as well as to submit public reports on the implementation of ESG (Environmental.
Social, and Governanc.
principles (OJK 2.
In Malaysia, the Value-Based Intermediation (VBI) initiative, led by Bank Negara Malaysia, encourages Islamic banks to incorporate sustainability values, social responsibility, and positive impact into their missions, such as placing greater emphasis on clean and green carbon financing, to ensure a platform that supports a high-value green As of October 2023.
Islamic banks have disbursed more than RM16.
5 billion for clean and green carbon financing in 2022.
This funding supports green building and renewable energy projects, among others (BNM 2.
It shows that Indonesia and Malaysia have begun taking concrete steps to steer banking towards sustainability.
Despite this progress, green banking in Indonesia and Malaysia remains dominated by a secular, value-neutral ESG In Indonesia, the commitment to achieve Net-Zero Emissions by 2060 and the implementation of the SDGs position the banking sector as a key actor in financing the green economic transition (Riananda and Fasa 2.
Market participants' lack of understanding of ESG concepts has contributed to low ESG acceptance in Islamic banking.
Sharia banks in Indonesia and Malaysia that implement green banking often merely imitate ESG models without fully adapting them to Islamic principles and values.
A significant challenge in integrating ESG principles into Islamic finance stems from unclear legislative restrictions and the lack of a standardized reporting framework.
This regulatory ambiguity creates confusion among Islamic financial institutions regarding the exact requirements for ESG compliance, thereby hindering effective implementation (Wardiman et al.
It creates a normative pISSN 2721-6241 eISSN 2721-7094 https://ejournal.
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vacuum, in which the values of maqasid syariah have not yet truly become the basis for assessing the sustainability of Islamic banks.
In other words, the current sustainability approach does not fully reflect the distinctiveness of the Islamic economic paradigm.
Maqashid al-Shariah is a method in Islamic law.
Allah revealed Shariah to achieve certain The theory of maqasid al-Shariah is similar to the theory of maslahah, which seeks to obtain maslahah.
Maqashid shariah has five basic objectives of protection, namely preserving faith .
ifz ad-di.
, preserving self .
ifz an-naf.
, preserving intellect .
ifz al-aq.
, preserving posterity .
ifz an-nas.
, and preserving wealth .
ifz al-ma.
These principles form the basis for formulating Islamic legal policies (Nazifah 2.
According to Syuhada .
, the concept of maqasid al-Shariah holds that Islamic law not only regulates rituals of worship but also social, economic, political, and environmental life.
The main objective of maqasid al-Shariah is to improve human welfare in this world and the hereafter.
Thus, the maqasid approach is not merely a legalistic framework but can also serve as a normative evaluative framework to assess whether a policy or practice is in accordance with Sharia objectives.
In the context of green banking, maqasid al-Shariah provides strong ethical parameters for assessing the ecological and social impacts of Islamic banking policies, going beyond technical, religion-neutral ESG Thus, this is an important aspect of maqasid al-Shariah that must be considered to continue operating in accordance with Islamic law.
Moreover, this is the philosophical basis of Sharia in implementing the idea of Green Banking in Islamic commercial banks (Anggraini.
Iqbal Fasa, and Fachri 2.
In addition, as businesses.
Islamic banks must keep pace with the times, including technological developments, innovations, and knowledge acquired by their human resources (Inayah and Prajawati 2.
It aligns with the objectives of maqasid alShariah in preserving intellect.
Although maqasid al-Shariah has enormous potential to support the sustainability agenda, there is still little research that systematically integrates maqasid alShariah and green banking practices, especially in the context of Islamic banks in Indonesia and Malaysia.
It is supported by a Scopus database search indicating that research specifically addressing the integration of maqasid al-Shariah with green banking remains very limited, with only around 10 publications between 2019 and 2026.
Meanwhile, studies on green banking more often take a technical or ESG approach without considering the Islamic normative framework.
As a result, there is no holistic evaluative framework available to assess the compatibility between green banking practices and maqasid al-Shariah values.
It creates an epistemic gap in the development of sustainable Islamic banking.
The integration of maqasid al-Shariah in green banking is an important and urgent step to ensure that sustainability practices in Islamic banks not only follow secular trends (ESG) but are also rooted in the Islamic value framework.
By adopting the maqasid approach.
Islamic banks ensure that their policies and practices not only meet ESG standards but also reflect the maqasid al-Shariah, which define the identity and core values of the bank's operations (Sabrina and Sisdianto 2.
In this way.
Islamic banks consider not only the economic and ecological impacts, but also the moral, social, and spiritual implications of financing decisions.
Indonesia and Malaysia are highly relevant research areas.
These two countries were chosen for study because the majority of their populations are Muslim.
According to a report by The Royal Islamic Strategic Studies Center (RISSC) entitled The Muslim 500, 2023 edition.
Indonesia has the largest Muslim population in Southeast Asia, with 237.
million people, or around 86.
7% of Indonesia's total population.
Malaysia ranks second with 84 million Muslims, accounting for around 61.
3% of its national population (RISSC 2.
addition, among ASEAN countries.
Indonesia and Malaysia have the most Islamic banks.
Because Indonesia and Malaysia are home to large Muslim populations, the development of Islamic banking has great potential.
The ASEAN region, which includes Indonesia and Malaysia, is in transition towards sustainable development, as evidenced by regional initiatives such as the ASEAN Taxonomy for Sustainable Finance (ASEAN 2.
In addition, many Islamic banks pISSN 2721-6241 eISSN 2721-7094 https://ejournal.
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in the region have begun implementing green banking.
However, they do not yet have maqasidbased frameworks to differentiate themselves from conventional banks.
Therefore, this study is highly significant for strengthening Islamic banks' sustainability practices at the regional level and for providing policy input to financial authorities in Indonesia and Malaysia.
Based on all of the above, this study occupies a strategic position in addressing the gap in the literature and practice regarding green banking based on Sharia objectives.
So far, research on comparing the performance of green banking between Islamic banks in Indonesia and Malaysia has been limited.
Research by Aisah.
Utomo, and Setyawan .
analyzes the effect of green banking on integrated maqasid al-Shariah performance.
It examines the moderating role of Islamic Social Reports.
The study focuses more on examining the causal relationship between green banking and performance variables than comparing green banking performance between the two countries.
Research by Hudaefi and Noordin .
focuses more on developing a framework for measuring and assessing the performance of Islamic banks in general, without analyzing differences in maqasid-based performance across In addition, research by Hudaefi and Noordin .
uses samples from 11 Islamic banks across various countries worldwide, with a very limited number of samples per country, so it does not focus solely on Indonesia and Malaysia.
Most previous studies rely on regression methods, while the use of multi-criteria decision-making methods, such as Simple Additive Weighting (SAW), combined with the maqasid al-Shariah index, remains limited.
Therefore, this study aims to fill this gap by measuring and comparing the green banking performance of Islamic banks in Indonesia and Malaysia using the maqasid al-Shariah index.
This study contributes to the literature in three ways.
First, it integrates the concept of green banking with the maqasid al-Shariah performance framework.
Second, this study conducts a comparative analysis of the specific performance of Islamic banks in Indonesia and Malaysia for the period 2022-2024, the most recent period.
Third, this study examines whether there are significant differences between the two countries using an independent sample t-test, which has not been used in any previous studies.
This study reviews the performance of Islamic banks in Indonesia that offer green financing and compares them with Islamic banks in Malaysia, focusing on green services and products, using the maqasid al-Shariah framework.
This study aims not only to explain how green banking is implemented by Islamic banks in Indonesia and Malaysia, but also to critically assess the suitability of these practices with the objectives of maqasid.
The results of this study can serve as a guide for many stakeholders on the benefits of green finance.
Literature review Green Banking As a member of the general public with determination, banks will play an important role in promoting and raising public awareness of carbon reduction efforts around the world through the implementation of green banking, also known as sustainable banking (Milza et al.
Green banking involves integrating environmental considerations into all aspects of banking, including customer interactions, marketing, service provision, internal operations, and project financing decisions.
Green banking is a concept that encourages ecologically responsible behavior and can be applied as a business model (Aisah.
Utomo, and Setyawan The implementation of green banking practices is crucial not only for fulfilling social and environmental responsibilities but also for improving banks' operational efficiency.
Innovation in Islamic banking products and services, oriented to the needs of the community and in accordance with Islamic principles, is essential to achieving competitive advantage (Dewi and Fasa 2.
By adopting green banking practices, affiliated Islamic banks provide services to customers while upholding basic environmental principles, such as integrating information technology into customer services and encouraging responsive customer behavior through digital banking (Ajrina Gustya.
Fasa, and Suharto 2.
Most previous studies in the context of pISSN 2721-6241 eISSN 2721-7094 https://ejournal.
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green banking have relied solely on regression approaches, leaving a gap in research using multi-criteria decision-making methods combined with the Sharia Maqasid Index.
Research by Aisah.
Utomo, and Setyawan .
analyzes the influence of green banking on integrated maqasid al-Shariah performance.
It examines the moderating role of Islamic Social Reports, focusing on the causal relationship between green banking and performance variables rather than on cross-country comparisons of green banking performance.
Hence, this study contributes to filling this gap by assessing Islamic green banking performance not only on the conventional sustainability framework but also using the T-test statistical analysis tool and the maqasid al-Shariah index, in line with the concept of Shariah.
This green banking approach can be a bank's effort to contribute to environmental sustainability by integrating its operational activities and business strategies.
This approach involves integrating environmental considerations into project financing and banking services as a whole.
Maqasid Shariah Maqasid al-Shariah refers to a system that aims to realize the ideals of Islamic teachings to attain a happy life in this world and the hereafter by reaping all benefits while rejecting harm.
This results in benefits for humanity.
Maslahah symbolizes the perfection of human goodness.
The objectives of maqasid al-Shariah are based on the idea of benefit, and their legal basis is the Qur'an and Hadith (Alwi et al.
According to research by scholars of usul al-fiqh, five main elements must be present in order to achieve benefit in this world and the hereafter.
These five elements are faith, self, intellect, posterity, and wealth.
These five basic elements can be explained as follows (Alwi et al.
: First, preserving faith.
Religion is paramount because all Sharia teachings command humans to act in accordance with God's will and pleasure.
Second, preserving self is intended to protect the right to live with dignity and preserve the Third, preserving intellect.
Sharia views human intellect as a precious gift from Allah SWT that must be preserved and protected.
Fourth, preserving posterity.
Allah desires that worldly and spiritual blessings continue from one generation to the next.
Fifth, preserving wealth.
Islam prohibits usury and fraudulent practices and establishes rules for muamalat, which includes buying and selling, renting, borrowing, pawning, and so on.
In addition to serving as a performance measurement tool, maqasid al-Shariah can also be used to adjust Islamic banking products (Koeswandana and Zahra 2.
It is because the majority of Islamic banking products are replicas of conventional banking products, which are clearly prohibited and need to be adjusted.
Julia and Kassim .
conducted a study comparing the performance of green banking between Islamic and conventional banks.
The results showed that Islamic banks outperformed conventional banks in green banking policies.
This result occurred because the objectives of green banking policies are closely aligned with the theory of maqasid al-Shariah.
Based on previous studies, maqasid al-Shariah is a performance measurement tool aligned with shariah objectives to preserve the environment, and thus shares similar principles with shariah financial institutions that must pay attention to the values in Islamic teachings.
Green Banking Performance Based on Maqasid al-Shariah A study by Bouteraa.
Hisham, and Zainol .
argues that green banking promotes sustainable and balanced human well-being across various dimensions, namely social, environmental, economic, and spiritual.
From an Islamic perspective, green banking supports humanity by protecting wealth, posterity, faith, and intellect.
It aligns with the five primary objectives of maqasid al-Shariah, namely the preservation of faith, self, intellect, posterity, and wealth (Alwi et al.
Research by Aisah.
Utomo, and Setyawan .
found that green banking has a positive influence on the Integrated Maqasid al-Shariah-Based Performance Measure.
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crucial for raising awareness of green banking's value to economic development and fostering greater commitment to green banking practices (Aisah.
Utomo, and Setyawan 2.
Based on research by Hudaefi and Noordin .
, the operationalization of the concept of maqasid al-Shariah into green banking indicators is carried out by breaking down the concept of maqasid al-Shariah into key dimensions that represent the five fundamental objectives of sharia: the preservation of faith, self, intellect, posterity, and wealth.
Each dimension is then broken down into specific elements relevant to banking activities, which are subsequently measured using quantitative indicators, including performance ratios, interestfree products, distribution of zakat and charity, agricultural financing, and operational These aspects align with green banking practices, where green banking involves integrating environmental considerations into all aspects of banking, including marketingAi which aligns with aspects of publicity or promotion, expanding the adoption of sustainable financial practices in societyAiwhich aligns with the expansion of Islamic bank branches, internal operations such as reducing energy and paper usage in daily operationsAiwhich aligns with operational efficiency, financing decisions for environmentally friendly projects, and environmental risk considerations when evaluating projects to be financedAiall of which align with the financing aspects within the maqasid al-Shariah (Aisah.
Utomo, and Setyawan 2.
Green Banking in Indonesia and Malaysia The performance of Islamic banks in Indonesia and Malaysia shows significant differences, particularly in terms of operational efficiency and profitability.
The Malaysian government's policies are more proactive in supporting the development of Islamic banking, and the country has a more mature Islamic financial infrastructure.
In contrast.
Islamic banking in Indonesia faces challenges in managing productive assets and controlling operational costs, which affect its financial performance (Fadila.
Wahyudi, and Khotijah 2.
The green banking program sponsored by Bank Syariah Indonesia is part of a green economy aligned with Islamic Every year.
Bank Syariah Indonesia reviews its funding clients to ensure that their operational activities do not harm the environment.
By issuing several laws and regulations.
Bank Indonesia can encourage banks to contribute more to improving environmental management standards.
Bank Syariah Indonesia is dedicated to helping protect the Islamic banking in Indonesia has adopted green banking practices, such as reducing electricity and water consumption, minimizing waste, and using less paper in The concept of tauhid in the Islamic economic system, which is often applied to the green banking business model, is upheld by the green banking model created at Bank Syariah Indonesia.
In line with Islamic economics and green economics, the green banking program seeks to promote sustainable development (Lelawati et al.
In the context of green banking, the World Bank Group's Global Knowledge and Research Center has collaborated with the technical working group of Bank Negara Malaysia (BNM) and the Securities Commission to support green financing programs and promote the concept of green banking among the Malaysian public.
The Islamic finance industry in Malaysia has consistently played a major role in promoting and implementing green banking programs.
Recently.
Malaysia issued its first green sukuk to finance ES projects.
Despite several efforts and the launch of green programs, their success depends entirely on bankers' green behavior (Ali et al.
It creates a conceptual gap between green banking practices and the Islamic economic paradigm, where green banking in Islamic banks remains instrumental rather than transformational and oriented towards Sharia objectives.
Based on previous studies, green banking performance is influenced not only by bank commitment but also by the strength of the macro policy framework and coordination among financial institutions.
Green banking in Islamic banking should not only serve as an environmental management instrument but also as a mechanism for achieving the maqasid al-Shariah objectives in the Islamic financial system.
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Hypothesis Development Maqasid al-Shariah refers to a system that aims to realize the ideals of Islamic teachings to attain a happy life in this world and the hereafter by reaping all benefits while rejecting harm.
This results in benefits for humanity.
With the existence of maqasid al-Shariah, there is synergy between syariah as law and the achievement of objectives in providing benefits (Alwi et al.
Research by Hudaefi and Noordin .
shows that, although it did not explicitly test for differences, the study measured green banking performance using the maqasid al-Shariah framework across 11 countries, yielding maqasid al-Shariah index scores of 0.
995 for Indonesian Islamic banks and 0.
370 for Malaysian Islamic banks.
This difference in maqasid alShariah Index results indicates that there is a significant difference between the green banking performance of Islamic banks in Indonesia and Malaysia based on the maqasid al-Shariah H1: There is a significant difference in the performance of green banking in Islamic banking in Indonesia and Malaysia when viewed based on the Maqasid Shariah Index.
Figure 1 Research Framework Method This study uses a descriptive quantitative approach.
This study uses a cross-sectional analysis of 3-year observation of secondary data from Islamic banking financial reports registered with Bank Indonesia and Bank Negara Malaysia for 2022-2024.
This study uses the MADM (Multiple Attribute Decision Makin.
and quantitative SAW (Simple Additive Weightin.
The Simple Additive Weighting (SAW) method was used in this study to combine various green banking performance indicators based on the maqasid al-Shariah Index.
SAW is widely used in multi-criteria decision-making problems because it allows pISSN 2721-6241 eISSN 2721-7094 https://ejournal.
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integrating various performance indicators by assigning weights to each criterion and calculating composite scores via weighted summation.
The number of comparisons between the weights of each attribute and the attribute rankings in a variable produces a total value for each variable (Ramadhani and Mutia 2.
Research by Hudaefi and Noordin .
used this approach to measure shariah-based performance indicators at Islamic banks.
In this study.
SAW was applied to combine green banking indicator values related to the maqasid al-Shariah dimension into a single performance score for each bank.
The resulting scores were then used to compare the performance of Islamic banks in Indonesia and Malaysia.
All Islamic commercial banks registered with Bank Indonesia (BI) and Bank Negara Malaysia (BNM) constitute the population of this study.
There will be a total of 30 Islamic banks between 2022 and 2024, comprising 16 in Malaysia (BNM 2.
and 14 in Indonesia (OJK The samples in this study were selected based on data availability and financial statement relevance, namely 11 Islamic banks registered with Bank Indonesia and 10 Islamic banks registered with Bank Negara Malaysia during 2022-2024.
Several Islamic banks were excluded from the research sample, which included three Indonesian Islamic banks, namely Bank Jabar Banten Syariah.
Bank NTB Syariah, and Bank Nano Syariah, as well as 6 Malaysian Islamic banksAinamely MBSB Bank Berhad.
HSBC Amanah Malaysia Berhad.
Hong Leong Islamic Bank Berhad.
Public Islamic Bank Berhad.
RHB Islamic Bank Berhad, and Standard Chartered Saadiq Berhad because they were difficult to access online or lacked sufficient data relevant to this study.
Based on the specified criteria, the number of objects used in this study is shown in Table 1.
Table 1 research sample criteria Criteria Registered with their respective central banks Banking financial reports that are difficult to access online and lack sufficient data relevant to the research Number of samples Total samples Total samples during 3 years of observation Islamic Bank in Indonesia Islamic Bank in Malaysia Source: secondary data .
rocessed, 2.
Table 2 research samples Indonesian Islamic Banks PT Bank Syariah Indonesia Malaysian Islamic Banks Affin Islamic Bank Berhad PT Bank Muamalat Indonesia PT Bank Mega Syariah PT Bank Panin Dubai Syariah PT Bank Victoria Syariah PT Bank BCA Syariah PT Bank BTPN Syariah PT Bank Aceh Syariah PT Bank Aladin Syariah PT Bank KB Bukopin Syariah PT Bank Riau Kepri Syariah Al Rajhi Banking & Investment Corporation Berhad Alliance Bank Islamic Berhad AmIslamic Bank Berhad Bank Muamalat Malaysia Berhad Bank Islam Malaysia Berhad CIMB Islamic Bank Berhad Kuwait Finance House (Malaysi.
Berhad Maybank Islamic Berhad OCBC Al-Amin Bank Berhad Source: secondary data .
rocessed, 2.
This study uses secondary data in the form of Islamic banking financial reports registered with Bank Indonesia and Bank Negara Malaysia for the period 2022-2024.
Data pISSN 2721-6241 eISSN 2721-7094 https://ejournal.
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collection techniques were carried out through documentation and the review of annual reports of the Islamic banks that were the subject of the study.
Several experts in fiqh.
Islamic banking, and Islamic economics have developed a maqasid al-Shariah index to measure performance.
They then identified appropriate performance ratios and assigned weights to each component of the ratio (Ramadhani and Mutia Table 3 and Table 4 provide further information on the Green Banking performance measurement approach based on maqasid al-Shariah and variable weights.
Table 3 maqashid shariah performance measurement model Variable Preserving Faith (Hifz al-Di.
Preserving Self (Hifz al-Naf.
Theory/Concept Maintaining faith is the main goal of Sharia law, ensuring that spirituality, morality, and the relationship between humans and Allah are preserved (Chapra 2.
Preserving human life is the most fundamental goal and (Chapra 2.
Elements Performance Ratios Interest-free products Interest Oe free income Total income Publicity Publicity expense Total expenses Charity Charity gained Total charity Employee welfare Zakat fund Total no.
of branches Preserving Intellect (Hifz al-Aq.
Preserving Posterity (Hifz al-Nas.
Preserving Wealth (Hifz al-Ma.
Intellect is the primary tool for understanding revelation, science, and development.
Therefore, intellect must be protected and developed through education (Chapra Preserving posterity includes stable, harmonious family institutions that raise morally generations (Chapra 2.
The development of wealth is important for supporting human welfare and fair Islam distribution of wealth, the prohibition of usury, the obligation of zakat, and the pISSN 2721-6241 eISSN 2721-7094 https://ejournal.
id/index.
php/jps Employee expenses Total income Zakat paid Net assets Total no.
of branches this year Total no.
of branches in the previous year Education grants Education grants Total income Research expense Research expense Total income Agricultural financing Bay A ycayco Oe ycycaycoycayco yceycnycuycaycuycaycnycuyci Total financing Training Training expense Total expenses Non performing NPF(L) Total financing Mudarabah financing ycAycyccycaycycaycaycaEa yceycnycuycaycuycaycnycuyci Total financing Musharakah financing ycAycycEaycaycycaycoycaEa yceycnycuycaycuycaycnycuyci Total financing JPS (Jurnal Perbankan Syaria.
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avoidance of waste and exploitation (Chapra 2.
Restructured Mudarabah financing Restructured Musharakah financing Total restructured ycoycyccycaycycaycaycaEa yceycnycuycaycuycaycnycuyci Total restructured Total restructured ycoycycEaycaycycaycoycaEa yceycnycuycaycuycaycnycuyci Total restructured Return on Asset (ROA) Net income Total Asset Return on Equity (ROE) Net Income Total Equities Operational efficiency Operating expenses Operating revenue Source: (Hudaefi and Noordin 2.
Table 4 variable weights in the maqasid shariah index Variable Variable Weight in percent Preserving Faith (Hifz al-Di.
Preserving Self (Hifz al-Naf.
Preserving Intellect (Hifz al-Aq.
Preserving Posterity (Hifz al-Nas.
Preserving Wealth (Hifz al-Ma.
Elements E1.
Interest-free products E2.
Publicity Total E3.
Charity E4.
Employee welfare E5.
Zakat fund E6.
Total no.
of branches Total E7.
Education grants E8.
Research expense Total E9.
Agricultural financing E10.
Training Total E11.
Non performing financing E12.
Mudarabah financing E13.
Musharakah financing E14.
Restructured Mudarabah financing E15.
Restructured Musharakah financing E16.
Return on Asset (ROA) E17.
Return on Equity (ROE) E18.
Operational efficiency Total Elements Weight in percent Source: (Hudaefi and Noordin 2.
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indicator, and determining their rankings based on the maqasid al-Shariah index (Ramadhani and Mutia 2.
These steps are:
Determining performance indicators:
Interest-free income/total income (R.
Publicity expense/total expenses (R.
Charity gained/total charity distributed (R.
Employee expenses/total income (R.
Zakat paid/net assets (R.
Total no.
of branches this year/total no.
of branches in the previous year (R.
Education grants/total income (R.
Research expense/total income (R.
Bay al-salam financing/total financing (R.
Training expense/total expenses (R.
NPF(L)/total financing (R.
Mudarabah financing/total financing (R.
Musharakah financing/total financing (R.
Total restructured mudarabah financing/total restructured financing (R.
Total restructured musharakah financing/total restructured financing (R.
Net Income/total asset (R.
Net Income/total equities (R.
Operating expenses/operating revenue (R.
Calculating the green banking performance of Islamic banks based on each Performance Indicator (PI).
The performance ratio weight for each attribute is then multiplied by the variable's Performance Indicator (PI) is the mathematical name for the performance indicator calculation model.
It is described by (Hudaefi and Noordin 2.
as follows:
Preserving Faith (O.
PI (O.
= W11 y E11 y R11 W11 y E12 y R12 PI (O.
= W11 (E11 y R11 E12 y R.
Where: O1 is the first maqashid index of the concept of maqashid shariah, which is to preserving W11 is the weight of preserving faith E11 is the weight for the first element in O1 (Interest-free product.
E12 is the weight for the second element in O1 (Publicit.
R11 is the performance ratio for the first element in O1 R12 is the performance ratio for the second element in O1 Preserving Self (O.
PI (O.
= W22 y E23 y R23 W22 y E24 y R24 W22 y E25 y R25 W22 y E26 y R26 PI (O.
= W22 (E23 y R23 E24 y R24 E25 y R25 E26 y R.
Where: O2 is the second maqashid index of the concept of maqashid shariah, which is to preserving self.
W22 is the weight of preserving self E23 is the weight for the first element in O2 (Charit.
E24 is the weight for the second element in O2 (Employee welfar.
E25 is the weight for the third element in O2 (Zakat fun.
E26 is the weight for the fourth element in O2 (Total no.
of branche.
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R23 is the performance ratio for the first element in O2 R24 is the performance ratio for the second element in O2 R25 is the performance ratio for the third element in O2 R26 is the performance ratio for the fourth element in O2 Preserving Intellect (O.
PI (O.
= W33 y E37 y R37 W33 y E38 y R38 PI (O.
= W33 (E37 y R37 E38 y R.
Where: O3 is the third maqashid index of the concept of maqashid shariah, which is to preserving intellect.
W33 is the weight of preserving intellect E37 is the weight for the first element in O3 (Education grant.
E38 is the weight for the second element in O3 (Research expens.
R37 is the performance ratio for the first element in O3 R38 is the performance ratio for the second element in O3 Preserving Posterity (O.
PI (O.
= W44 y E49 y R49 W44 y E410 y R410 PI (O.
= W44 (E49 y R49 E410 y R.
Where: O4 is the fourth maqashid index of the concept of maqashid shariah, which is to preserving posterity W44 is the weight of preserving posterity E49 is the weight for the first element in O4 (Agricultural financin.
E410 is the weight for the second element in O4 (Trainin.
R49 is the performance ratio for the first element in O4 R410 is the performance ratio for the second element in O4 Preserving Wealth (O.
PI (O.
= W55 y E511 y R511 W55 y E512 y R512 W55 y E513 y R513 W55 y E514 y R514 W55 y E515 y R515 W55 y E516 y R516 W55 y E517 y R517 W55 y E518 y R518 PI (O.
= W55 (E511 y R511 E512 y R512 E513 y R513 E514 y R514 E515 y R515 E516 y R516 E517 y R517 E518 y R.
Where: O5 is the fifth maqashid index of the concept of maqashid shariah, which is to preserving W55 is the weight of preserving wealth E511 is the weight for the first element in O5 (Non-performing financin.
E512 is the weight for the second element in O5 (Mudarabah financin.
E513 is the weight for the third element in O5 (Musharakah financin.
E514 is the weight for the fourth element in O5 (Restructured Mudarabah financin.
E515 is the weight for the fifth element in O5 (Restructured Musharakah financin.
E516 is the weight for the sixth element in O5 (Return on Asset (ROA)) E517 is the weight for the seventh element in O5 (Return on Equity (ROE)) E518 is the weight for the second eighth in O5 (Operational efficienc.
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R515 is the performance ratio for the fifth element in O5 R516 is the performance ratio for the sixth element in O5 R517 is the performance ratio for the seventh element in O5 R518 is the performance ratio for the eighth element in O5 The ranking of Islamic banks is determined based on the total of all performance indicators from the five maqashid shariah variables, which can be formulated as follows (Hudaefi and Noordin 2.
Index Maqashid Shariah (IMS) = PI (O.
PI (O.
PI (O.
PI (O.
PI (O.
Where: PI is the Performance Index O1 is the first maqashid index of the concept of maqashid shariah, which is to preserve faith O2 is the second maqashid index of the concept of maqashid shariah, which is to preserve self O3 is the third maqashid index of the concept of maqashid shariah, which is to preserve intellect O4 is the fourth maqashid index of the concept of maqashid shariah, which is to preserve posterity O5 is the fifth maqashid index of the concept of maqashid shariah, which is to preserve wealth In this study, an independent-samples t-test was conducted to test the research hypothesis that there is a difference in green banking performance between Islamic banks in Indonesia and Malaysia, based on the maqasid al-Shariah framework.
The T-Test is one of the testing methods used in parametric statistical testing.
(Magdalena and Krisanti 2.
The t-test shows how well a single independent variable explains the dependent variable.
The t-test is conducted using a significance level of 0.
05 (=5%).
The acceptance or rejection of this hypothesis test is based on the decision of whether the significance.
-taile.
If the value is > 05, then the null hypothesis (H.
is accepted, and the alternative hypothesis (H.
is rejected.
It means that there is no significant difference between Islamic banking in Indonesia and Malaysia.
If the sig.
-taile.
< 0.
05, then the null hypothesis (H.
is rejected, and the alternative hypothesis (H.
is accepted.
It means there is a significant difference between Islamic banking in Indonesia and in Malaysia.
Results and discussion Table 5 green banking performance ratio based on the first maqashid shariah for 2022-2024
Islamic Banks Islamic Banks in Indonesia
BRIS
BBMI
BMS
PNBS
BVIS
BCAS
BTPS
BAS
BANK
BKPS
BRKS
Islamic Banks in Malaysia
AIBB
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ARBB
ABIB
ABB
BMMB
BIMB
CIBB
KFHB
MIB
OCBC
Source: secondary data .
rocessed, 2.
When looking at the results of green banking performance based on maqasid al-Shariah, the two countries in the first objective, namely preserving faith, showed no difference in the R11 ratio throughout 2022-2024.
The highest R12 ratio in Indonesia in 2022-2024 was recorded by BANK at 0.
BVIS ranked last with a ratio of 0.
In Islamic banking in Malaysia.
BIMB had the highest R12 ratio during 2022-2024, at OCBC recorded the lowest R12 ratio at 0.
In terms of this ratio.
Islamic banks in Indonesia are superior to those in Malaysia.
However, the difference is not very significant.
With this percentage.
Islamic banks have promoted their banking services to the maximum extent possible.
Table 6 green banking performance ratio based on the second maqashid shariah for 2022-2024
Islamic Banks Islamic Banks in Indonesia
BRIS
BBMI
BMS
PNBS
BVIS
BCAS
BTPS
BAS
BANK
BKPS
BRKS
Islamic Banks in Malaysia
AIBB
ARBB
ABIB
ABB
BMMB
BIMB
CIBB
KFHB
MIB
OCBC
R23
R24
R25
Preserving Self (O.
R26 Source: secondary data .
rocessed, 2.
Table 6 shows variations in the green banking performance of Islamic banks in Indonesia and Malaysia during the 2022Ae2024 period based on ratios within the maqasid shariah framework.
In general.
Islamic banks in Indonesia have a wider range of values than those in Malaysia.
For example, the R23 ratio shows that the highest value is 15.
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is much higher than Malaysia's range of only 2.
It shows that banks in Indonesia have a fairly large range of performance.
Conversely.
Islamic banks in Malaysia tend to show a more even distribution of values, with some banks even having values close to zero.
For the R24 ratio, both countries show similar patterns, with only small differences.
The ratio in Indonesia is 18471 and 1.
09574, and in Malaysia, it is between 0.
00969 and 0.
Still, the difference in Indonesia is bigger than in Malaysia.
For the R25 ratio, both countries fall within a very narrow range, specifically below 001 for all Islamic banks in Indonesia and not exceeding 0.
00280 in Malaysia.
The dimension measured by this ratio still has a relatively limited contribution to overall green banking Furthermore, the R26 ratio shows a fairly clear contrast between the two Indonesia has a high maximum value of 3.
00000, but there are also banks with a value of 0, indicating a gap in implementation.
Malaysia, on the other hand, has a more even distribution, with values ranging from 0 to 1.
It means that performance equity is better.
Table 7 green banking performance ratio based on the third maqashid shariah for 2022-2024
Islamic Banks Islamic Banks in Indonesia
BRIS
BBMI
BMS
PNBS
BVIS
BCAS
BTPS
BAS
BANK
BKPS
BRKS
Islamic Banks in Malaysia
AIBB
ARBB
ABIB
ABB
BMMB
BIMB
CIBB
KFHB
MIB
OCBC
Preserving Intellect (O.
R37
R38
Source: secondary data .
rocessed, 2.
Based on Table 7, the performance of Islamic banks in Indonesia and Malaysia in terms of the R37 ratio shows relatively high variation among banks.
The values range from 0 to 01319 for Islamic banks in Indonesia, and from 0 to 0.
02439 for Islamic banks in Malaysia, with only a few banks recording a positive contribution, while the rest remain at zero.
There is a noticeable difference in how the principle of preserving intellect is being applied by Islamic banks in both countries.
At the R38 ratio, a similar trend is clear.
In Indonesia, the figures range from 0 to 02088, which suggests that only a handful of banks are stepping up to contribute.
In contrast, many others have yet to make a meaningful impact.
Meanwhile, in Malaysia, the highest value was recorded by BIMB at 0.
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Other banks, such as AIBB.
ARBB.
ABIB.
ABB.
BMMB.
CIBB.
KFHB.
MIB, and OCBC, were at the lowest position, with a value of 0.
Overall, these results show that the preserving intellect dimension of maqasid shariah is not being used consistently in either Indonesia or Malaysia.
Performance is mostly limited to a small number of banks, with the highest values being less Most banks have not yet shown a significant contribution.
Table 8 green banking performance ratio based on the fourth maqashid shariah for 2022-2024 Islamic Banks Preserving Posterity (O.
R49
R410
Islamic Banks in Indonesia
BRIS
BBMI
BMS
PNBS
BVIS
BCAS
BTPS
BAS
BANK
BKPS
BRKS
Islamic Banks in Malaysia
AIBB
ARBB
ABIB
ABB
BMMB
BIMB
CIBB
KFHB
MIB
OCBC
Source: secondary data .
rocessed, 2.
Table 8 shows that Islamic banks in Indonesia have a wide range of R49 ratios, with values ranging from 0 to 0.
Some banks have reached high values, while others are still at zero.
It shows that there are differences in how green banking is being put into practice in this area.
In contrast.
Islamic banks in Malaysia exhibit lower and more concentrated R49 values, ranging from 0 to 0.
It indicates that performance on the R49 ratio in Malaysia is relatively more homogeneous, although at a lower level compared to Indonesia.
A similar pattern is observed for the R410 ratio.
Islamic banks in Indonesia show even more dynamic performance variations, with a value range from 0.
00507 to 0.
It shows that the banks are using different levels of implementation.
At the same time.
Islamic banks in Malaysia tend to have lower and more concentrated values, from 0 to 0.
00757, with the majority of banks even at zero.
This condition reflects the still-limited achievement of this indicator in Malaysia.
Table 9 green banking performance ratio based on the fifth maqashid shariah: ratios R511R514 for 2022-2024
Islamic Banks Islamic Banks in Indonesia
BRIS
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R512
Preserving Wealth (O.
R513
R514
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BBMI
BMS
PNBS
BVIS
BCAS
BTPS
BAS
BANK
BKPS
BRKS
Islamic Banks in Malaysia
AIBB
ARBB
ABIB
ABB
BMMB
BIMB
CIBB
KFHB
MIB
OCBC
Source: secondary data .
rocessed, 2.
The analysis of ratios R511-R518 shows that Islamic banks in Indonesia and Malaysia had different levels of green banking performance between 2022 and 2024.
Some ratios, such as R511 and R512, show clear differences in performance among Islamic banks in Indonesia.
is shown by the fact that some banks have higher values than others.
It shows that Indonesia's use of maqasid shariah-based green banking principles remains uneven across the banking The R511 ratio shows that Islamic banks in Malaysia exhibit varying performance levels, but the differences are not large.
The emerging pattern for the R512 ratio, on the other hand, is more limited.
Only a few banks had positive values.
most stayed at 0.
This condition indicates that the dimension assessed by R512 has not yet been widely adopted in Malaysia's Islamic banking sector or is still in the early stages of development.
The R513 ratio in both countries indicates a significant difference in achievement levels, reflecting variations in the effectiveness of implementing certain aspects of the maqasid alshariah.
In Indonesia, this variation is more pronounced, with a wide range of values.
BANK and BTPS differ by 0.
82025, whereas in Malaysia it is largely limited to a few banks demonstrating standout performance, such as AIBB.
ABB.
KFHB.
MIB, and OCBC.
For the R514 ratio, both in Indonesia and Malaysia, most banks reported a value of zero or close to 0.
In fact, among Islamic banks in Malaysia, all reported the same value.
It shows that there was no measurable contribution to the aspect represented by this ratio during the time of observation.
This condition indicates that the dimension measured by the R514 ratio has not yet become a primary focus in green banking practices or is still facing challenges in its implementation and reporting.
Table 10 green banking performance ratio based on the fifth maqashid shariah: ratios R515R518 for 2022-2024
Islamic Banks Islamic Banks in Indonesia
BRIS
BBMI
BMS
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R516
Preserving Wealth (O.
R517
R518
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PNBS
BVIS
BCAS
BTPS
BAS
BANK
BKPS
BRKS
Islamic Banks in Malaysia
AIBB
ARBB
ABIB
ABB
BMMB
BIMB
CIBB
KFHB
MIB
OCBC
Source: secondary data .
rocessed, 2.
For the R515 ratio.
Islamic banks in Indonesia showed a more even distribution of values, with PNBS recording the highest value at 0.
In Malaysia, on the other hand.
Islamic banks showed a pattern like R514, where all Islamic banks had a value of 0.
means that there was no way to measure the effect that the R515 ratio had during the time of Thus, this ratio also reflects that the related dimension has not yet become a top priority or still faces challenges in implementation and reporting within the context of green For ratios R516 and R517, performance fluctuations are evident, with both positive and negative values, particularly in Indonesia.
BANK and BKPS both had bad results for ratios R516 and R517, which shows this.
It shows that the implementation of green banking policies is not equally effective or stable across all banks.
In Malaysia, the resulting values are generally more stable, with deviations typically less than 1.
However, there are still some differences.
The R518 ratio indicates differences in performance characteristics between the two Sharia banks in Indonesia have a wider range of values, leading to greater performance differences.
On the other hand, sharia banks in Malaysia have a more concentrated distribution of values, with almost all banks getting results below 1.
It means that performance is more stable and consistent across banks.
Table 11 ranking of Islamic banks in Indonesia and Malaysia based on the maqashid shariah
index for 2022-2024
Islamic
Banks Total
Ranking of Each Country Ranking Overall Research
Object
Islamic Banks in Indonesia
BRKS
BTPS
BKPS
BAS
BCAS
PNBS
BBMI
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BMS
BRIS
BANK
BVIS
Islamic Banks in Malaysia
KFHB
BMMB
BIMB
AIBB
MIB
ARBB
OCBC
ABIB
CIBB
ABB
Source: secondary data .
rocessed, 2.
Figure 2 Average Performance of Green Banking Based on the maqashid shariah index for Source: secondary data .
rocessed, 2.
The best Islamic bank in Indonesia, according to the maqashid index, is BRKS, which ranked first during the observation period with a maqasid shariah index score of 1.
12052, while the bank with the best performance in Malaysia is KFHB, with a maqasid index score of 0.
The lowest green banking performance among Islamic banks in Indonesia, as measured by the maqashid index, was recorded by BVIS with a score of 0.
Among Islamic banks in Malaysia, the lowest score was recorded by ABB at 0.
12558 during the observation period.
Table 12 group statistics results from the independent sample t-test Banks Maqasid Shariah Index Results Mean Std.
Deviation Std.
Error Mean Indonesian Islamic Banks Malaysian Islamic Banks Source: secondary data .
rocessed, 2.
Table 13 independent sample t-test Results pISSN 2721-6241 eISSN 2721-7094 https://ejournal.
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Levene's Test for Equality of Variances Sig.
t-test for Equality of Means Sig.
Mean Difference Std.
Error Difference 95% Confidence Interval of the Difference Lower Upper Equal Source: secondary data .
rocessed, 2.
Maqasid Shariah Index Results Equal In Table 13 above, particularly in the t-test for equality of means column, under Equal variances assumed (Sig.
-taile.
, a value of 0.
049 is obtained.
This value is less than In accordance with the decision rule made above, it can be decided that H0 is rejected or considered incorrect .
on-linear and not as expecte.
and H1 is accepted or considered correct .
inear as expecte.
It indicates a significant difference between the results of the maqasid alShariah index in Islamic banking in Indonesia and Malaysia.
Significant Differences in the Performance of Green Banking in Islamic Banking in Indonesia and Malaysia Based on the Maqasid Shariah Index.
From the perspective of maqasid al-Shariah, economic activities in Islam must aim to realize maslahah.
Maslahah is a symbol of the perfection of human goodness that can be realized through five main elements that must be present in order to obtain maslahah in this world and the hereafter.
These five elements are faith, self, intellect, posterity, and wealth (Alwi et al.
The implementation of maqasid al-Shariah in modern Islamic banking is not only about sharia compliance but also about supporting environmental sustainability and social welfare.
Green banking is one form of maqasid implementation in environmental protection.
Based on the five elements of maslahah in the theory of maqasid al-Shariah, the findings show differences in green banking performance between Islamic banking in Indonesia and Malaysia, as measured by the maqasid al-Shariah index in 2022-2024.
These findings are in line with previous research by Hudaefi and Noordin .
, which showed significant differences in green banking performance between Islamic banks in Indonesia and Malaysia when measured using the maqasid al-Shariah index.
The results of the independent-samples T-test show that Islamic banking in Indonesia has a higher average of 0.
3700 than Islamic banking in Malaysia, with an average of 0.
The dominance of Indonesian Islamic banks in this study indicates that some banks have begun to integrate sustainability aspects into their business activities more tangibly than their counterparts in Malaysia.
The average performance of green banking in Islamic banking in Indonesia using the maqashid index for 2022-2024 is 0.
36799, while the average performance in Malaysia is The performance of green banking in Islamic banking in Indonesia, using the maqashid index to assess preservation of faith, is 0.
1032 on average, while that of Islamic banks in Malaysia is 0.
In terms of preserving faith.
Islamic banks in Indonesia and Malaysia offer a balanced mix of interest-free products.
Both countries perform their Sharia functions well by not implementing interest-bearing products that are categorized as usury and are not in accordance with Islamic teachings.
In terms of publicity.
Indonesia is slightly superior to Malaysia.
This study is not in line with the research by Ramadhani and Mutia .
, which found that Islamic banks in Malaysia are superior to those in Indonesia.
In 2022-2024, the average publication costs incurred by BANK, as the Islamic bank with the highest publicity ratio pISSN 2721-6241 eISSN 2721-7094 https://ejournal.
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in Indonesia, accounted for 16% of total operating expenses.
However, the overall difference between Islamic banks in Indonesia and Malaysia is not too significant.
It concludes that both countries recognize the importance of publications that can influence consumer decisionmaking.
It aligns with the maqasid al-Shariah theory, which aims to preserve faith by promoting green products that comply with shariah principles.
The average green banking performance of Islamic banks in Indonesia in terms of preserving self is 0.
20347, while that of Islamic banks in Malaysia is 0.
Research by Hudaefi and Noordin .
shows that Islamic banks in Indonesia outperform those in Malaysia in green banking performance.
In this study, the aspect of preserving self in Islamic banks in Indonesia and Malaysia shows insignificant differences in employee welfare and zakat It shows that both countries fulfill their obligations regarding employee welfare and distribute zakat funds, which are important for preserving self under the maqasid alShariah theory.
In terms of charity and total branches.
Islamic banks in Indonesia are significantly superior to Islamic banks in Malaysia.
It can be used as input by Islamic banks in Malaysia to contribute more to distributing charity and to increase the total number of banking branches, so that the public can access green products in banking more easily.
In terms of intellectual preservation.
Indonesian Islamic banks have an average performance of 0.
In contrast.
Malaysian Islamic banks have an average performance of This study supports the findings of Ramadhani and Mutia .
, who concluded that Indonesian Islamic banks outperform those in Malaysia.
In general, although the average value of Islamic banks in Indonesia is slightly higher than in Malaysia, there is no significant gap between the two countries in terms of preserving intellect.
Islamic banks in both countries perform well in distributing educational grants and contributing to research funding.
It shows that both countries align with the theory of maqasid al-Shariah in contributing to the preservation of intellect, which is the main tool for understanding revelation and science, and therefore needs to be protected and developed through education (Chapra 2.
The average performance of Islamic banks in Indonesia in terms of preserving posterity 00728, while Malaysia's is 0.
In terms of agricultural financing.
Islamic banks in both countries perform well at channeling funds to support environmental sustainability.
However, in terms of employee training/education.
Islamic banks in Indonesia are superior, as they actively allocate funds to develop their human resources.
This study aligns with research by Ramadhani and Mutia .
, which shows that Indonesia is superior in terms of training compared to Islamic banks in Malaysia.
It can be used as input for Islamic banks in Malaysia to be more active in financing human resource development programs within their companies in order to maximize their performance for the advancement of Islamic banks themselves, so that they can contribute more to preserving posterity, which is an important aspect in the theory of maqasid al-Shariah.
Based on the theory of maqasid al-Shariah, the protection and development of wealth are important for supporting human welfare and fair distribution.
Islam emphasizes the fair distribution of wealth, the prohibition of usury, the obligation of zakat, and the avoidance of waste and exploitation (Chapra 2.
The average performance of Islamic banks in Indonesia in terms of wealth preservation is 0.
05328, while that of Islamic banks in Malaysia is 0.
Research by Hudaefi and Noordin .
shows that the green banking performance of Islamic banks in Indonesia is superior to that of Islamic banks in Malaysia.
In terms of non-performing financing.
Return on Assets (ROA).
Return on Equity (ROE), and operational efficiency, the majority of Islamic banks in Indonesia and Malaysia have performed quite well, contributing significantly to wealth preservation.
However, regarding restructured mudarabah financing.
Islamic banks in Indonesia and Malaysia have not been transparent about the amount of restructuring costs, which has affected asset preservation outcomes in each country.
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Islamic banks in Indonesia are superior to Islamic banks in Malaysia.
Sharia banks in Indonesia contribute to asset preservation by financing in accordance with Islamic contracts.
PNBS, one of Indonesia's sharia banks with the highest results in asset preservation, allocates 11% of its total financing to mudarabah and 81% to musharakah.
It can be learned by Islamic banks in Malaysia to contribute more to financing that is in accordance with Islamic principles and can be explicitly stated in financial reports so that they can further contribute to preserving wealth, which is an important aspect in the theory of maqasid al-Shariah.
Overall.
Islamic banks in Indonesia have achieved better green banking performance, as measured by the maqasid alShariah index, than those in Malaysia.
However, both countries still need to implement green banking that is more closely integrated with their banking business models.
Regulators in both countries need to explicitly develop a green banking policy framework aligned with maqasid alShariah, so that Islamic banking can be more focused on carrying out its green financial Islamic banks in both countries need to explicitly present aspects of green banking aligned with Sharia objectives more clearly in their financial reports, so they can produce better performance figures that support green finance aligned with Islamic principles.
Conclusions Based on the results and discussion, there is a significant difference in the maqasid alShariah index scores between Islamic banking in Indonesia and Malaysia.
The results of the independent-samples T-test show that Islamic banking in Indonesia has a higher average of 3700 than Islamic banking in Malaysia, with an average of 0.
It is because the results of the Islamic banking performance index in Indonesia are significantly superior to those of Islamic banking in Malaysia in terms of the objectives of preserving faith, preserving self, preserving intellect, preserving posterity, and preserving wealth.
Theoretically, this study can broaden our understanding of green banking performance in Islamic banking in Indonesia and Malaysia based on the maqasid al-Shariah index measurement tool.
However, this study still has limitations, such as being limited to 2022-2024 and including only 11 Islamic banks in Indonesia and 10 in Malaysia, so it cannot serve as a benchmark for other Islamic banks.
In addition, the companies sampled in this study were Islamic banks, so the findings cannot be applied to other Islamic institutions, such as Islamic pawnshops or Islamic insurance companies.
Furthermore, there is a lack of secondary data on the reasons for data disclosure, as data availability is greatly influenced by the formats of financial reports and accounting systems at each bank.
This study can contribute to the performance of green banking in Islamic banks in Indonesia and Malaysia using the maqasid index measurement tool in accordance with Islamic Sharia.
For this reason, future research is expected to examine all Islamic banks in Indonesia and Malaysia to obtain more robust conclusions.
In addition, future research is expected to include additional time periods or Islamic segments, such as insurance companies and Islamic
References