An Islamic Vision Development Based Indicators in Analysing the Islamic Banks Performance: Evidence from Malaysia, Indonesia and selected GCC Countries

The current evaluation of Islamic Banks performance uses the conventional measurs, which is not unacceptable as the current Islamic Banks’ structure is mainly equal of its conventional counterparts in the sense that they are developed in the frame of business entity, thus businessbased performance such as profitability becomes the main concern. However, the fact that an Islamic Bank is governed and guided by Islamic Law, necessitates a deeper and more careful understanding of the purpose of the law itself. This subject should never be neglected, as the Sharia, itself exists for a bigger purpose than merely guidelines or a statement of what is allowed and what is prohibited. The theory of the purpose of law or maqasid al-Shari’ah as first proposed and structured by al-Juwaini, has patched the path towards understanding thus better implementation of Islam as it should to capture and achieve its higher intent, the real well-being of human in this world (al-falah fid-dunya) and the hereafter (al-falah fil-aakhirah). This study learns from Schumpeterian Finance-Growth Theory vis-à-vis the Development in the light of Maqasid al-Shari’ah by Chapra (2008) to: first, highlight the Islamic-based Finance-Development Theory that focuses on development in the light of Maqasid al-Shari’ah. It then analyses its Islamicvision- development-based (IVDB) performance of Islamic banks in achieving al-falah as a complement to its business-based measurement. The analysis will be based on annual reports of 20 Islamic banks in major continent of players in Islamic Finance namely Malaysia, Indonesia and selected GCC countries. The result is anticipated to give a new breath in measuring performance of Islamic financial institution, in this case Islamic banks and highlight the Islamic vision of its function and how far it has fulfilled the vision.