A standard of corporate social responsibility for Islamic financial institutions: A preliminary study

There is a difference of opinion in academic and practitioner circles regarding the social role of Islamic Finance Institutions (IFIs). A structured definition of this social role based on Islamic principles of social equity and on justice due to redistribution of wealth is presented in this study. The role of IFIs as financial institutions that fulfill a collective religious obligation and their position as financial intermediaries are two reasons why IFIs should have a social responsibility. This study gives a practical framework to IFIs to address their social responsibilities. The study proposes that the guidelines for the social responsibilities of financial corporations should be similar to the guidelines for personal responsibility. This is based on the contradictions between permissible and impressible actions.