Abstract:
Although Islamic banking industry has attained significant growth, researches showed that performance of Islamic banks lag behind its counter partner traditional Banks. In addition some argue that Islamic banks are moving towards the traditional banking system. The Islamic banking system in Pakistan and Bangladesh have existed for more than forty Years. However, still today the Islamic banks do not have their own performance measurement tools and still use traditional tools that are limited to financial measurement ratios only. In terms of features and commitments of Islamic banks, it is considered inappropriate to use these orthodox measurement tool for evaluating their performance. Therefore, the purpose of this research is to assess the performance of Islamic banks using the Shariah Index and CAMELS method. The population of this research is Islamic Banks of Pakistan and Bangladesh from 2010-2019, and the data analysis technique used is quantitative study with descriptive tactic. The shariah Maqsid Index method has three variables, educate the individuals, establish Justice and achieve public interest. The CAMELS method has five variables; Capital, Asset Quality, Management, Earning, and Liquidity. By the use of these evaluation tools which play as a dual role in attaining financial performance and sharia efficiency.
