Abstract
Islamic banking has tremendous development since the system has strong foundation that based on Syari’ah principles. One of the Syari’ah requirements is to pay zakat as one of Islamic pillars. From Islamic point of view, Allah promise to those who contribute their wealth (zakat), Allah will award the contributors multiple times. Thus, the Allah’s promise is the main motivation of the study to investigate the relationship between corporate zakat payable and firm’s performance of the Islamic banks in Malaysia. The study used Pearson correlation coefficient to analyse the relationships. The study conducted on 16 Islamic banks in Malaysia and used secondary data extracted from annual reports for the year ended 2010 until 2015. This study showed that there was a low degree of commitment to pay corporate zakat among the Islamic banks in Malaysia. However, it is interesting to note that there is significant relationship between firm’s size and amount of zakat paid which reveals that total asset will grow as amount of zakat increase.
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Acknowledgements
This work is partially supported by Research Acculturation Grant Scheme (RAGS) 2014, granted by Ministry of Higher Education Malaysia. The authors also gratefully acknowledge the helpful comments and suggestions of the reviewers, which have improved the presentation.
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Abd Samad, K., Said, R., Mohd Nasir, I.N., Mahshar, M., Kamarulzaman, M.H. (2018). Analysis of the Role of Zakat on Islamic Banking Performance. In: Said, R., Mohd Sidek, N., Azhar, Z., Anuar Kamarudin, K. (eds) State-of-the-Art Theories and Empirical Evidence. Springer, Singapore. https://doi.org/10.1007/978-981-10-6926-0_18
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DOI: https://doi.org/10.1007/978-981-10-6926-0_18
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