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Purpose
This paper aims to understand corporate social responsibility (CSR) narrative under the Islamic banking paradigm by three aspects, narrative review of the literature, review of the definitions of CSR and review of factors that cause divergence from conventional percepts.


Design/methodology/approach
This is a theoretical paper based on literature and aims to understand the CSR narrative under the paradigm of Islamic banking.


Findings
Religion brings new dimensions of ethics and expands the scope of morality in business. Islamic banking is a new wave of corporation whose social goals are as much important as making profit. There are diverse narrations and definitions prevailing in the literature of CSR under the Islamic paradigm which also encounters the aspects of divergence from conventional percepts. The academic debate of CSR-Islamic banking brings on surface a plausible CSR paradigm, that is to guide the role of Islamic banking in society under the Islamic provisions, ethics and axioms. This paper also paves the way for future direction, particularly in terms of a holistic understanding of CSR narrative under the Islamic banking paradigm.


Research limitations/implications
This is a theoretical paper; it primarily discusses the theoretical aspects of CSR narrative under the paradigm of Islamic banking, while it does not give insight into the empirical narrative or disclosure of CSR in Islamic banking.


Practical implications
The theoretical review of literature brings plausible understanding, that Islamic banking is a new wave of corporate and has standings on divine guidance. The structure of the institution in its foundation insists on real economic activity. The legitimacy of Islamic banking has roots in ethical compliance and in inculcating the broader interests of stakeholders. There are several social responsibilities, which are expected from the practitioners of Islamic banking. The practitioners as well must understand that the CSR of Islamic banking is far beyond the conventional percepts of CSR.


Originality/value
There are several normative and theoretical studies in the domain of CSR-Islamic banking. It is hard to find a comprehensive narrative review of such literature. This review is unique, which brings a holistic understanding of CSR narrative under the Islamic banking paradigm.

PurposeThis study aims to examine whether corporate social responsibility (CSR) of Islamic banking is delivering financial returns or otherwise enhancing the cost.Design/methodology/approachThe methodology of this study includes the content-analysis approach with aid of the CSR disclosure index, and it deploys the partial least squares regression to examine the CSR-financial performance relationship. Regarding CSR disclosure and financial measures, this study takes the data from the annual reports of Islamic banking of Pakistan, from the year 2003 to 2017.FindingsThe results of this study indicate that there is a significant positive relationship exists between CSR and financial performance of Islamic banks, consistent with the instrumental-stakeholder theory. These results imply that Islamic banks, which ensure that CSR is practiced extensively, and aim to positively affect their stakeholders, perform well. Hence, the CSR engagement by Islamic banks yields instrumental returns rather it is a cost.Practical implicationsIslamic banks of Pakistan must work on a better CSR policy, it would enhance the reputation of Islamic banks, on the other hand, it would also increase their capabilities to cope with future reputation damage and negative news, thus it would protect and secure the financial results. In addition to these, investors of Islamic banks must also look at the social and ethical engagements of Islamic banks of Pakistan, while making investment decisions.Originality/valueIn general, there is a dearth of research in the domain of CSR-financial performance regarding Islamic banking. This is one of the studies which contributes to this area.