DOI: 10.12688/f1000research.180543.1 ISSN: 2046-1402

From Indicators to Insights of Driven Framework for Bankruptcy Risk in Islamic Banks: A Systematic Literature Review

Lina Nugraha Rani, Nisful Laila, Ega Rusanti, Sylva Alif Rusmita, Kamola Ergun, Akhmad kusuma Wardhana
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This study aims to provide an integrated picture of the risk of bankruptcy in Islamic banks based on its determinants, countermeasures, and predictive models in the development of an early warning system that is in accordance with Sharia principles and sensitive to systemic issues. This study used a Systematic Literature Review (SLR) following the PRISMA protocol and bibliometric analysis using 130 high-quality papers selected and analyzed using keyword clustering, thematic mapping, and synthesis of mitigation strategies and predictive models. The results show that the risk of Islamic bank bankruptcy is not only determined internally by financial variables such as capital structure, profitability, and efficiency, but is also externally influenced by regulatory risks, macroeconomic volatility, geopolitical risks, and emerging sustainability issues. The review identifies five thematic clusters: bankruptcy forecasting models, regulatory and competitiveness issues, macroeconomic risks and crises, governance and institutional drivers, and ESG-based strategies. The mainstreaming of Islamic social finance and ESG in bankruptcy risk prevention is an untapped area of literature. This study confirms that it is beneficial for policymakers, regulators, and bank management to strengthen Islamic banks’ resilience. This study underscores product diversification, strengthening Sharia governance, integrating ESG indicators, and implementing Islamic social finance as mitigation and anticipatory measures.

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