Islamicity Performance Index of Islamic Banking in Indonesia

The Islamicity performance index is one of the methods to measure the Islamic Banks’ performance in financial term, including the fairness principle, Halal, and the purification. This research was aimed to analyse the Islamicity Index of Islamic Bank as the indicators of the performance. This research used descriptive statistical analysis. The population of this research was Indonesia Islamic banks, which the period of research was from 2011-2015. During this period, seven banks with purposive sampling method were taken as the samples. Five ratios are used in Islamicity Performance Index to measure the performance which are profit sharing, charity, equitable distribution, welfare of directors and employees and incomes, Islamic vs. non Islamic income source. Based on the analysis among the ratios, the best performance of profit sharing ratio, charity welfare of directors and employees were well applied by Bank Muamalat Indonesia. In another ratio, Bank Syariah Mandiri had the highest place in the implementation of Equitable Distribution Ratio. While Bank BRI Syariah had the highest position in determining the Islamic Incomes vs. Non-Islamic Incomes ratio. The conclusion for overall is Islamicity Performance Index has been applied by the Islamic Banks in performance measurement. The results of this study can provide feedback to stakeholders such as governments, investors and customers to be able to assess the performance of Islamic banks so that it becomes the basis for determining policy in terms of banking, investment decisions, and the decision to determine the choice. Keywords— Islamicity Performance Index; Islamic Bank; Islamic Banks’ Performance; Profit Sharing;