The Role of Islamic Banks in Indonesia: A Systematic Literature Review

  • Mahmud Yusuf Universitas Islam Negeri Antasari Banjarmasin
  • Parman Komarudin Universitas Islam Kalimantan MAB Banjarmasin
  • Muhamad Rahmani Abduh Universitas Islam Negeri Antasari Banjarmasin
  • Sri Ana Farhanah Universitas Islam Negeri Antasari Banjarmasin
  • Hayatun Nafisah Universitas Islam Negeri Antasari Banjarmasin
Keywords: Keywords : Islamic Banks, Intermediary Institutions, Gross Regional Domestic Product



This study aims to determine the extent to which the role of Islamic banks in the economy in Indonesia. The method used in this research is a systematic literature review which begins with data collection using the Publish or Perish search engine, the assessment is carried out through the websites and https://garuda.kemdikbud.go .id/, to presentation using content analysis techniques, mapping with Vosviewer, and ending with analysis using Biddle's Role Theory. Based on a systematic literature review conducted on 22 Sinta-indexed national journals for the 2017-2022 period, it was found that Islamic banks have an important role in Indonesia, namely as; driving economic growth, assisting the development of MSMEs, assisting the development of the halal industry, helping to tackle the Covid 19 pandemic, and several other roles. Judging from Biddle's Role Theory; 1) Structurally, Islamic banks in Indonesia have played their role as financial institutions through raising investment funds from third parties and channeling financing, 2) Functionally, Islamic banks in Indonesia function as drivers of national and regional economic growth, providers of capital for MSMEs, providers of financing and supporting facilitators for the halal industry, to help tackle Covid 19 through digitalisation of Islamic banking, services that implement health protocols, assistance in procuring Personal Protective Equipment (PPE), assistance with KUR distribution, providing relief for customers affected by the pandemic, and maximizing CSR programs, 3) Interactionally, the role of Islamic banks in Indonesia has not been very effective due to interaction problems in the form of a lack of socialization, promotion, community literacy, and access to Islamic banks which are relatively difficult to reach.


Abror, A., Patrisia, D., Engriani, Y., Evanita, S., Yasri, Y., & Dastgir, S. (2019). Service quality, religiosity, customer satisfaction, customer engagement and Islamic bank’s customer loyalty. Journal of Islamic Marketing, 11(6), 1691–1705.
Adams, K. A., & McGuire, E. K. (2022). Research methods, statistics, and applications. Sage Publications.
Alam, Md. K., Ahmad, A. U. F., & Muneeza, A. (2022). External Sharī‘ah audit and review committee VIS‐A‐VIS Sharī‘ah compliance quality and accountability: A case of Islamic banks in Bangladesh. Journal of Public Affairs, 22(1).
Albaity, M., Mallek, R. S., & Noman, A. H. Md. (2019). Competition and bank stability in the MENA region: The moderating effect of Islamic versus conventional banks. Emerging Markets Review, 38, 310–325.
Alexakis, C., Izzeldin, M., Johnes, J., & Pappas, V. (2019). Performance and productivity in Islamic and conventional banks: Evidence from the global financial crisis. Economic Modelling, 79, 1–14.
Amini, N. H., Muflih, M., & Marwansyah. (2020). The Effect of Religiosity and Financial Considerations on Behavioral Intention toward Islamic Banking Industry: The Mediating Role of Attitude: Proceedings of the International Seminar of Science and Applied Technology (ISSAT 2020). International Seminar of Science and Applied Technology (ISSAT 2020), Bandung, Indonesia.
Aslam, E., & Haron, R. (2020). Does corporate governance affect the performance of Islamic banks? New insight into Islamic countries. Corporate Governance: The International Journal of Business in Society, 20(6), 1073–1090.
Asnawi, N., Sukoco, B. M., & Fanani, M. A. (2019). The role of service quality within Indonesian customers satisfaction and loyalty and its impact on Islamic banks. Journal of Islamic Marketing, 11(1), 192–212.
Athari, S. A., & Bahreini, M. (2021). The impact of external governance and regulatory settings on the profitability of Islamic banks: Evidence from Arab markets. International Journal of Finance & Economics, ijfe.2529.
Bilgin, M. H., Danisman, G. O., Demir, E., & Tarazi, A. (2021). Bank credit in uncertain times: Islamic vs. conventional banks. Finance Research Letters, 39, 101563.
Boukhatem, J., & Ben Moussa, F. (2018). The effect of Islamic banks on GDP growth: Some evidence from selected MENA countries. Borsa Istanbul Review, 18(3), 231–247.
Caporale, G. M., & Helmi, M. H. (2018). Islamic banking, credit, and economic growth: Some empirical evidence. International Journal of Finance & Economics, 23(4), 456–477.
Creswell, J. W., & Creswell, J. D. (2017). Research design: Qualitative, quantitative, and mixed methods approaches. Sage publications.
Daniya, T., Geetha, M., Kumar, B. S., & Cristin, R. (2020). Least square estimation of parameters for linear regression. International Journal of Control and Automation, 13(2), 447–452.
Effendi, I., Murad, M., Rafiki, A., & Lubis, M. M. (2021). The application of the theory of reasoned action on services of Islamic rural banks in Indonesia. Journal of Islamic Marketing, 12(5), 951–976.
Elmawazini, K., Khiyar, K. A., & Aydilek, A. (2020). Types of banking institutions and economic growth. International Journal of Islamic and Middle Eastern Finance and Management, 13(4), 553–578.
Farag, H., Mallin, C., & Ow-Yong, K. (2018). Corporate governance in Islamic banks: New insights for dual board structure and agency relationships. Journal of International Financial Markets, Institutions and Money, 54, 59–77.
Gulzar, R., Ibrahim, M. H., & Ariff, M. (2021). Islamic Banks: History, Stability and Lessons from Cooperative Banking. Jurnal Institutions and Economies, 13(3), 1–26.
Hamidi, L., & Worthington, A. C. (2021). How social is Islamic banking? Society and Business Review, 16(1), 51–70.
Harun, M. S., Hussainey, K., Mohd Kharuddin, K. A., & Farooque, O. A. (2020). CSR Disclosure, Corporate Governance and Firm Value: A study on GCC Islamic Banks. International Journal of Accounting & Information Management, 28(4), 607–638.
Hassan, M. K., & Aliyu, S. (2018). A contemporary survey of islamic banking literature. Journal of Financial Stability, 34, 12–43.
Hassan, M. K., Khan, A., & Paltrinieri, A. (2019). Liquidity risk, credit risk and stability in Islamic and conventional banks. Research in International Business and Finance, 48, 17–31.
Hussien, M. E., Alam, Md. M., Murad, Md. W., & Wahid, A. N. M. (2019). The performance of Islamic banks during the 2008 global financial crisis: Evidence from the Gulf Cooperation Council countries. Journal of Islamic Accounting and Business Research, 10(3), 407–420.
Ibrahim, M. H., & Rizvi, S. A. R. (2018). Bank lending, deposits and risk-taking in times of crisis: A panel analysis of Islamic and conventional banks. Emerging Markets Review, 35, 31–47.
Jan, A. A., Lai, F.-W., & Tahir, M. (2021). Developing an Islamic Corporate Governance framework to examine sustainability performance in Islamic Banks and Financial Institutions. Journal of Cleaner Production, 315, 128099.
Julia, T., & Kassim, S. (2020). Exploring green banking performance of Islamic banks vs conventional banks in Bangladesh based on Maqasid Shariah framework. Journal of Islamic Marketing, 11(3), 729–744.
Kartika, T., Firdaus, A., & Najib, M. (2019). Contrasting the drivers of customer loyalty; financing and depositor customer, single and dual customer, in Indonesian Islamic bank. Journal of Islamic Marketing, 11(4), 933–959.
Khasanah, U., & Wicaksono, A. T. S. (2021). Intermediary performance of Islamic banks in the disruption era: Does it contribute to economic growth. Banks and Bank Systems, 16(1), 100–200.
M. Anwar, S., Junaidi, J., Salju, S., Wicaksono, R., & Mispiyanti, M. (2020). Islamic bank contribution to Indonesian economic growth. International Journal of Islamic and Middle Eastern Finance and Management, 13(3), 519–532.
Mergaliyev, A., Asutay, M., Avdukic, A., & Karbhari, Y. (2021). Higher Ethical Objective (Maqasid al-Shari’ah) Augmented Framework for Islamic Banks: Assessing Ethical Performance and Exploring Its Determinants. Journal of Business Ethics, 170(4), 797–834.
Mukhibad, H., Nurkhin, A., & Rohman, A. (2020). Corporate governance mechanism and risk disclosure by Islamic banks in Indonesia. Banks and Bank Systems, 15(1), 1–10.
Nasution, F. N., & Rafiki, A. (2019). Islamic work ethics, organizational commitment and job satisfaction of Islamic banks in Indonesia. RAUSP Management Journal, 55(2), 195–205.
Naz, S. A., & Gulzar, S. (2022). Impact of islamic finance on economic growth: an empirical analysis of muslim countries. The Singapore Economic Review, 67(01), 245–265.
Neifar, S., & Jarboui, A. (2018). Corporate governance and operational risk voluntary disclosure: Evidence from Islamic banks. Research in International Business and Finance, 46, 43–54.
Nguyen, Q. K. (2021). Oversight of bank risk-taking by audit committees and Sharia committees: Conventional vs Islamic banks. Heliyon, 7(8), e07798.
Nomran, N. M., Haron, R., & Hassan, R. (2018). Shari’ah supervisory board characteristics effects on Islamic banks’ performance: Evidence from Malaysia. International Journal of Bank Marketing, 36(2), 290–304.
Otoritas Jasa Keuangan, R. (2022). Statistik Perbankan Syariah-Desember 2021.
Ousama, A. A., Hammami, H., & Abdulkarim, M. (2019). The association between intellectual capital and financial performance in the Islamic banking industry: An analysis of the GCC banks. International Journal of Islamic and Middle Eastern Finance and Management, 13(1), 75–93.
Paltrinieri, A., Dreassi, A., Rossi, S., & Khan, A. (2021). Risk-adjusted profitability and stability of Islamic and conventional banks: Does revenue diversification matter? Global Finance Journal, 50, 100517.
Parsa, M. (2022). Efficiency and stability of Islamic vs. conventional banking models: A meta frontier analysis. Journal of Sustainable Finance & Investment, 12(3), 849–869.
Rashid, A., Hassan, M. K., & Shah, M. A. R. (2020). On the role of Islamic and conventional banks in the monetary policy transmission in Malaysia: Do size and liquidity matter? Research in International Business and Finance, 52, 101123.
Ridwan, R., & Mayapada, A. G. (2022). Does sharia governance influence corporate social responsibility disclosure in Indonesia Islamic banks? Journal of Sustainable Finance & Investment, 12(2), 299–318.
Rizaldy, M. R., & Ahmed, H. (2019). Islamic legal methodologies and Shariah screening standards: Application in the Indonesian stock market. Thunderbird International Business Review, 61(5), 793–805.
Rizvi, S. A. R., Narayan, P. K., Sakti, A., & Syarifuddin, F. (2020). Role of Islamic banks in Indonesian banking industry: An empirical exploration. Pacific-Basin Finance Journal, 62, 101117.
Saeed, M., Izzeldin, M., Hassan, M. K., & Pappas, V. (2020). The inter-temporal relationship between risk, capital and efficiency: The case of Islamic and conventional banks. Pacific-Basin Finance Journal, 62, 101328.
Safiullah, M., & Shamsuddin, A. (2019). Risk-adjusted efficiency and corporate governance: Evidence from Islamic and conventional banks. Journal of Corporate Finance, 55, 105–140.
Salem, R., Usman, M., & Ezeani, E. (2021). Loan loss provisions and audit quality: Evidence from MENA Islamic and conventional banks. The Quarterly Review of Economics and Finance, 79, 345–359.
Setyowati, N. (2019). Macroeconomic Determinants of Islamic Banking Products in Indonesia. Economies, 7(2), 53.
Smaoui, H., Mimouni, K., Miniaoui, H., & Temimi, A. (2020). Funding liquidity risk and banks’ risk-taking: Evidence from Islamic and conventional banks. Pacific-Basin Finance Journal, 64, 101436.
Suhartanto, D. (2019). Predicting behavioural intention toward Islamic bank: A multi-group analysis approach. Journal of Islamic Marketing, 10(4), 1091–1103.
Tabash, M. I. (2019). Banking Sector Performance and Economic Growth: An Empirical Evidence of UAE Islamic Banks. In M. Mateev & P. Poutziouris (Eds.), Creative Business and Social Innovations for a Sustainable Future (pp. 39–45). Springer International Publishing.
Ullah, S., Harwood, I. A., & Jamali, D. (2018). ‘Fatwa Repositioning’: The Hidden Struggle for Shari’a Compliance Within Islamic Financial Institutions. Journal of Business Ethics, 149(4), 895–917.
Usman, H., Projo, N. W. K., Chairy, C., & Haque, M. G. (2022). The exploration role of Sharia compliance in technology acceptance model for e-banking (case: Islamic bank in Indonesia). Journal of Islamic Marketing, 13(5), 1089–1110.
Wu, H.-C., Cheng, C.-C., & Hussein, A. S. (2019). What drives experiential loyalty towards the banks? The case of Islamic banks in Indonesia. International Journal of Bank Marketing, 37(2), 595–620.
Yanikkaya, H., Gumus, N., & Pabuccu, Y. U. (2018). How profitability differs between conventional and Islamic banks: A dynamic panel data approach. Pacific-Basin Finance Journal, 48, 99–111.
Yusof, S. A., Budiman, M. A., & Amin, R. M. (2018). Relationship between Religiosity and Individual Economic Achievement:Evidence from South Kalimantan, Indonesia. Journal of King Abdulaziz University Islamic Economics, 31(2), 3–16.
How to Cite
Yusuf, M., Komarudin, P., Rahmani Abduh, M., Farhanah, S. A., & Nafisah, H. (2023). The Role of Islamic Banks in Indonesia: A Systematic Literature Review. Al-Mashrafiyah: Jurnal Ekonomi, Keuangan, Dan Perbankan Syariah, 7(1), 16-35.
Abstract viewed = 275 times