Developing a sustainability framework for Islamic banking: a <i>Maqashid Shariah</i> quadruple bottom line approach

Purpose This study aims to construct dimensions and indicators of Islamic Banking Sustainability (IBS) that align with the practices in Indonesia, as well as to formulate a model of IBS based on the research findings. Design/methodology/approach The research uses a mixed-methods approach, combining: Delphi Method for expert consensus, Analytical Hierarchy Process (AHP) for prioritization of dimensions and indicators and Mann-Whitney U test for expert-practitioner comparison. Findings Identified four dimensions of IBS: Business Sharing (23.13%), Social Religious (18.97%), Responsible Environment (24.84%) and Ethics and Sharia Principle (33.07%), collectively referred to as Maqashid Shariah Quadruple Bottom Line (MSQBL). Furthermore, there are 30 indicators for IBS, including 8 that were not identified in earlier research. It was observed that the Ethics and Sharia Principle Dimension and the Human Resources Education and Training Indicator attained the most important weight in the framework of the IBS model in Indonesia. In-depth discussions with experts have led to the MSQBL model providing interdimensional integration that fosters synergy among various sustainability dimensions. Research limitations/implications The study is novel in an Indonesian context, but it does not fully address its applicability outside of Indonesia, which limits its broader impact. Practical implications This research provides a foundational basis and assistance for regulators as they arrange the IBS Index in Indonesia, which is yet to be established. The proxy data on the proposed indicators can be found in the Islamic bank reports. Social implications This study describes an IBS model that can be used by Islamic banks to carry out all four dimensions of IBS in a balanced way (Mizan) for the advantage of stakeholders. Originality/value First, the paper provides a unique contribution by developing a framework of dimensions and indicators for the evaluation of IBS using the MSQBL approach, which is strategically and operationally implemented. It integrates Delphi and AHP methods, a relatively underexplored approach in IBS literature, particularly in Indonesia. The discovery of eight new indicators demonstrates a divergence from previous research findings. Second, this research has yielded a newly defined IBS model that is appropriate for Indonesia. The MSQBL model offers the interdimensional integration that creates synergy among sustainability dimensions, rarely seen in other models.