Premium Essay

Perceptions on Islamic Banking

In: Business and Management

Submitted By sitihasnidar
Words 2499
Pages 10
Bank Employees Perceptions on Islamic Banking Acceptance

Abstract

This research was conducted to investigate bank employee perceptions on Islamic banking acceptance. The questionnaires were distributed to bank employee at Maybank Islamic Wangsa Maju (Islamic bank) and Maybank Setapak (Islamic window) Kuala Lumpur. Interestingly, few of the bank employees possessed a relevant academic background or relevant experience in banking on this career. The bank employee also claimed that they had very limited knowledge in this area prior to working with the banks; thus, the issue of the availability of well-trained and skilled employees must be addressed critically by the government, industry players and educationists for the sustainable growth of Islamic banking in Malaysia, and to meet the target set for the year 2011.

Keywords: Bank Employees perceptions, Islamic Banking, Product & Service, Training & Experience

1.0 INTRODUCTION
1.1 Background of study

In 1970, Islamic banking was almost unknown and considered to be wishful thinking. By the early years of the twenty-first century, however, Islamic banking the deniable truth has emerged, for it is growing at a steady pace. The size of the industry, which amounted to a few hundred thousand dollars in 1975, had reached billions of dollars by 2004. The value of Shari’ah-compliant accounts worldwide is estimated between US$200 billion and US$500 billion and is growing at an average annual rate of 10-15 per cent. It is predicted that Islamic banks will control around 40-50 per cent of Muslims’ savings by 2009/10, for the population of Muslims in the world in 2006 has been calculated to be more than 1.2 billion (Zaher and Hassan, 2001).

The establishment of Islamic banks is associated with the Islamic revolution and the escalating awareness of Muslim society in embracing Islam as its way of life, in the fields

Similar Documents

Premium Essay

Perception Towards Islamic Banking

...1.0 Abstract Islamic Finance is an abstract concept until the first half of the twentieth century. In Malaysia, it has been almost three decades when the first Islamic bank makes its debut. Islamic banks have to compete with its competitors which is a conventional banks which have longer history than Islamic banks. For this competition, Islamic Finance have to know the awareness, understanding and perceptions of Malaysians towards it. Islamic Finance not only available for Muslims, but it also available for non-Muslims as well. In Malaysia, 40% of the population is non-Muslims and hence non-Muslims market is equally important to Islamic Finance (Bashir & Mail, 2011; Latiff, 2007). The purpose of this research is to examine the level of awareness, understanding and perceptions of Muslims in Malaysia of Islamic Banking products and services. In additional, this study also aims to investigate if any demographic influence it’s means the structure of population of the awareness, understanding and perceptions of Islamic Finance products and services among Muslims in Malaysia. A total of 50 respondents from different course and carrier in Unikl are selected for the purpose of this study. For the analysis, we used the primary data and Secondary data was adopted to analyse the results. The results show that more than half of the respondents are aware of the Islamic Finance in Malaysia but they do not aware of most of the products and services offered by Islamic banks. Muslims understanding...

Words: 4135 - Pages: 17

Premium Essay

People Perception of Islamic Banking in Pakistan

...People Perception of Islamic Banking Muhammad Sohail Bhatti Student MS Islamic Banking & Finance University of Management & Technology Abstract: This research was conducted to gauge the perception of general public about Islamic Banking in Pakistan. Questionnaires were distributed to customers of Islamic Banking and conventional banking. The results revealed that most of the people do not have adequate knowledge of the concepts of Islamic Banking. Some of the participants did not even know that “Riba” is forbidden in Islam. Less awareness about the Islamic banking concepts can be the main cause of negative perception among general public. This study also revealed that many people think that Islamic banks have not played their proper role in creating the awareness and knowledge about the concepts and working of Islamic banking. The study might help the Islamic Banks to reconsider their marketing strategies so that the negative perceptions of the general public may be changed to a positive one. Key Words: Islamic Banking, Perception Introduction: Islamic Banking is relatively new concept as compared to conventional banking. The history of conventional banking dates back to about two hundred years. Whereas Islamic banking is only in its infancy stage and started only about 17 years ago. People are so used to the conventional side of the banking that it is a little hard for them to understand the Islamic Banking concepts and the working and services offered by them...

Words: 4431 - Pages: 18

Premium Essay

Term Paper Perception of Islamic Banking

...1.0 INTRODUCTION Perception is an important aspect to understand or predict the behaviors of customers in some situation, according to Sethi, 2002. Eagly and Chaiken, 1993 in their article said that general attitudes are relatively good predictors of general behavioral likelihoods. Furthermore, customer’s attitude toward a product or service is influenced by a match of the product or service user image with the customer’s self-concept . Islamic banking which started in 1983 in Malaysia, refers to a system of banking that complies with Islamic law which also known as Shariah law. The underlying principles that govern Islamic banking are mutual risk and profit sharing between parties and the assurance of fairness for all transactions based on an underlying business activity. It does not allow any transactions based on interest (riba), gambling (maisir) and speculative trading (gharar) at all cost. In terms of products and services, there are more than 40 Islamic financial products and services that may be offered by the banks using various Islamic concepts such as Mudharabah, Musyarakah, Murabahah, Al-Bai Bithaman Ajil, Al-Ijarah, Al-Takjiri, Qard Hasan, Al- Wakalah, Al-Kafalah and Wadiah. This study was stated the most perception of Islamic banking product among the Malaysian customer. As one of the important in service industry today, Islamic banking is no longer regarded only to fulfil the religious obligation of the Muslim. It is also how the Islamic banks want to market...

Words: 3598 - Pages: 15

Premium Essay

Example of Proposal

...influence services quality in the Islamic banking system in Malaysia Student name: Tai Yen Ying Doris Student ID: Scm-014993 Course: Bachelor In Business Management Content Pages 1. Cover pages 1 2. Content 2 3. Abstract 3 4. 1.0 Introduction 3 5. 1.1 Research Background 3 6. 1.2 Problem statement 5 7. 1.3 Research Question 5 8. 1.4 Research objectives 6 9. 1.5 Significance of study 6 10. 1.6 Scope of study 7 11. 1.7 Dissertation Outline 8 12. 2.1 Introduction 8 13. 2.2 Defining topic 9 14. 2.3 Defining element in the framework 15. 2.3.1 Customer satisfaction 12 16. 2.3.2 Customer loyalty 14 17. 2.3.3 Customer perception 15 18. 2.3.4 Switching cost 16 19. 2.4 Theories 17 20. 2.5 Proposed Framework 19 21. 3.1 Introduction 20 22. 3.2 Research hypothesis 20 23. 3.3Research Equation 20 24. 3.4 Operational Definition 21 25. 3.5 Measurement 22 26. 3.6 Data collection 25 27. 3.7 Data analysis 27 28. Conclusion 28 29. References 29 Abstract This research is to determine the factors explaining the service quality in the Islamic banking system in Malaysia. Data collection...

Words: 9563 - Pages: 39

Premium Essay

Performance of Islamic Banks

...four core areas of profitability, liquidity, credit risk and solvency through simple sectoral averages for both streams of banking. Table 1: Financial Performance of Islamic Vs Conventional Banking |PPERFORMANCE MEASURES |CONVENTIONAL BANKS | | | | | |ISLAMIC BANKS |COMMENTS | |Profitability | | | |Conventional Banking is dominating in | | |profitability | | | | | | | | |Conventional banking is dominating in liquidity | | ...

Words: 1711 - Pages: 7

Premium Essay

Problem, of, Islamic, Banking, in Bangladesh Pdf

...8th International Conference on Islamic Economics and Finance Prospects and Problems of Islamic Banking from Bank’s Perspective: A Study of Bangladesh Dr. Muhammad Z Mamun 1 This paper focuses on the prospect and growth potentials of Islamic banks in Bangladesh as perceived by Islamic and conventional bankers. The study noted that there is a high demand for interest-free banking services from a segment of people in Bangladesh who have a strong desire to abide by the rules and principals set by Shariah. Along with religious requirement, economic exigencies provide a new outlook to the role of banking in promoting investment/ productive activities, influencing distribution of income and adding stability to the economy. The Islamic banking sector is, however, criticized on several grounds by the Conventional bankers. The banks are believed not to apply the rules of Shariah completely. Islamic banks are said to include interest in their dealings to compete effectively with the Conventional banks. Moreover, conventional banks offering Islamic banking as a parallel service are thought to do so only to add to their profitability, by attracting people who value the Shariah based system by enjoying the advantages of the special treatments from the Central bank. According to the survey, suitable and supportive legal framework would facilitate better growth of this sector. Moreover, the lack of an inter-bank money market and sufficient supportive and link institutions in the sector, act...

Words: 11603 - Pages: 47

Premium Essay

Term Paper

...Comparative Performance Study of Conventional and Islamic Banking in Bangladesh Course Title: THEORY AND PRACTICES OF BANKING IN BANGLADESH Course Code: FBK 312 Submitted To: Md. Nur Nabi Assistant Professor Department of Finance and Banking Faculty of Business Administration and Management Patuakhali Science and Technology University Dumki, Patuakhali- 8602 Submitted by: Group: C (Level: 3, Semester: I) Session: 2012-2013 Faculty of Business Administration and Management Patuakhali Science and Technology University Dumki, Patuakhali- 8602 Date of Submission: 09th May 2015 ------------------------------------------------- Roll No | Registration No | Name of the Students | Signature | 1203051 | 03596 | Nusrat Jahan Rupa | | 1203053 | 03598 | Nusrat Yesmin | | 1203054 | 03599 | Nisath Salsabil Urmi | | 1203056 | 03601 | Mehedi Hasan | | 1203057 | 03602 | Hasan Shahria Nayeem | | 1203060 | 03605 | Khondokar Tanveer Ahsan | | 1203061 | 03606 | Sume Akter | | 1203062 | 03607 | Rased Amer Sohag | | 1203065 | 03610 | Nusrat Jahan Pinki | | 1203067 | 03612 | Rasel Miah | | ------------------------------------------------- Group Member Details ------------------------------------------------- ------------------------------------------------- ATTENDANCE REPORT 1) Level : 3 2) Semester : I 3) Course Code : FBK-312 4) Course Title : THEORY AND PRACTICES OF BANKING IN BANGLADESH 5) Date Of Presentation : 9th May...

Words: 6894 - Pages: 28

Premium Essay

Research Proposal Model

...Research Proposal On Why and how Islami Bank Bangladesh Limited achieved higher profitability than the highest profitable conventional bank, Prime Bank Limited in 2013 Submitted to XYZ Associate Professor University of Dhaka Submitted by ID: 16001, 16054, 16070, 16080 University of Dhaka Date of submission: November 11, 2014 Abstract: Islami Bank Bangladesh Limited is the highest profit earning bank in Bangladesh in recent years both in Islamic and Conventional banking system. A question has been raised mostly by the customers of conventional banks that how an Islamic bank can earn the highest profit without practicing any fixed interest rate. A confusion rises among them if there is necessarily any differences in the banking systems and processes between Islamic and Conventional banks. We want to research on this issue and find out the actual scenario behind the massive success of Islami Bank Bangladesh Limited as the highest profit earning bank of Bangladesh compared to the highest profit earning Conventional bank in 2013; Prime Bank Limited. 1. Problem statement: Why and how Islami Bank Bangladesh Limited achieved higher profitability than the highest profitable conventional ban, Prime Bank Limited in 2013. 2. Research objectives: The objectives of our research on the topic above are given below; * To find out the current position of IBBL and Prime Bank Ltd in the national economy. * To find out which bank is in the better position and for...

Words: 1188 - Pages: 5

Premium Essay

Proposal of Customer Satisfaction in Islamic Banking

...CHAPTER 1 INTRODUCTION 1.1 The Introductory Paragraph Islamic banking refers to a system of banking that complies with Islamic law also known as Shariah law. The underlying principles that govern Islamic banking are mutual risk and profit sharing between parties, the assurance of fairness for all and that transaction are based on an underlying business activity or asset. The Islamic banking system has gained momentum worldwide. There are now 16 Islamic banks and financial institution operating in Malaysia. The popularity of the Islamic banking system is not limited to the Islamic bank only. The conventional system also interested in Islamic banking system For instance, CIMB has established CIMB Islamic bank that operates in accordance with Islamic Shari’ah principles. Islamic banks faced with strong competition not only from Islamic bank but also from conventional banks. The Islamic banking system is different from the conventional banking system but have some similarities between the two. For example, an Islamic bank conduct s its activities in accordance with the Islamic Shari’ah principle that strictly prohibit any payment or receipt of interest. However, the Islamic bank can offer product and service which are similarity by conventional bank. When Islamic banks or conventional banks offered any new product or service, the successful depends on the customer satisfaction level towards that product or service. In this competition, they must have to give extremely high...

Words: 2771 - Pages: 12

Premium Essay

What Panasonic Learned from China

...All you need to do is to answer all the questions for the different discussions (200 words each) Topic 1: What factors affect the consumer's perceptions of fast food and its services? Summary: The two studies by M.K. Brady et al and Kim et al are concerned with the same question: what factors affect the consumer’s perceptions of fast food and its services? But while Kim et al. focuses on American college students to find out what factors that segment finds favourable in a fast-food service, M.K. Brady et al takes their study to the international level to find out how different cultural values can affect the consumer’s behavioural intentions relative to the fast-food industry and its services. Both articles agree that the majority of America customers prefer to trade-off between quality of services and expenditure required (expense-conscious). The American consumer tends to judge consumption of goods and services with a ‘neutral’ and logically based mindset; always asking the question of “is it worth my money?” Kim et al claims that due to relatively inexpensive, quick and convenient service, fast-food is becoming more and more popular among college students in North America. How could restaurants attract this emerging market? Further discussing in particular the college student market, and selecting Wendy’s, Burger King and McDonald’s as target examples will figure out the way to attract college students in fast-food services restaurant. Several factors are taken into consideration...

Words: 2252 - Pages: 10

Premium Essay

Islamic Economics

...Benefits The idea of Islamic banking was initiated and brought up by some economists who were conscious about socio economic development of Muslim nations based on Islamic principles. It was based on noble vision and objective of Islamic banking base on profit and loses sharing principle. The foundation of Islamic banking theory that they proposed was based on mudaraba and musharakah contracts as mechanism to operate Islamic banking system. “The early contributions on the theory of Islamic banking were only discussed as part of the subject in Islamic economic system. For example, the book by Qureshi on Islam and the Theory of Interest (Qureshi (l946)) which looked upon banking as a social service that should be sponsored by the government like other public institutions such as public health and education.2 His view was based on the point that the bank could neither pay any interest to account holders nor charge any interest on loans advanced. He also suggests the possibility for both Islamic banks and entrepreneur to create a partnership. No mention was made of profit-sharing.” Other economists were come up with different ideas at earlier stages such “the principle of mudarabah was appealed systematically by Uzair (l955). His main contribution lay in suggesting mudarabah as the main premise for 'interest less banking'. However, his argument that the Islamic bank should not make any capital investment with its own deposits rendered...

Words: 7677 - Pages: 31

Premium Essay

(91204980) Brand Image of Islamic Banks

...BRAND IMAGE OF ISLAMIC BANKS SUBMITTED BY TARIQ JALEES LT.COL(RETD) RAZA KAMAL ASSISTANT PROFESSOR DIRECTOR ACADEMICS COLLEGE OF MANAGEMENT SCIENCE PAF-KARACHI INSTITUTE OF ECONOMIC AND TECHNOLOGY KORANGI CREEK , KARACHI-75190 WWW.PAFKIET.EDU.PK UAN 111-723-733 TELEPHONE 5091114-7 FAX 92215091118 RESIDENCE ADDRESS OF TARIQ JALEES 87-Q, BLOCK-2, PECHS, KARACHI, RESIDENCE TELEPHONE 9221-4556308 MOBILE 0300-82007019 EMAL TARIQUEJ2004@YAHOO.COM TARIQJ@PAFKIET.EDU.PK 1 BRAND IMAGE OF ISLAMIC BANKS 1.0.0 Introduction What is Islamic banking? What is brand Image? Both the topics independently have been researched, discussed and deliberated so many times that the readers generally don’t fancy reading them. However, there is not a single research to best of our knowledge wherein researchers may have combined both the diversified topics. Lack of research on “brand image of Islamic bank” was one of the major motivator for undertaking this research. Thus the objective of this paper was to measure the brand image of Islamic banks, and develop the profile of the customers of Islamic banks. 1.1.0 Literature Survey In order to develop the conceptual background, the literature review has been structured as follows: 1.1.2 A brief over view on Islamic banking and literature on consumer behavior, characteristics and perception towards Shariah banks A brief overview of branding imaging concept An Overview Islamic Banking There are about 270 Islamic banks around the world (including subsidiaries...

Words: 4145 - Pages: 17

Premium Essay

Hello

...J.KAU: Islamic Econ., Vol. 9, pp. 55-65 (1417 A.H / 1997 A.D) Hamid Zangeneh and Ahmad Salam Central Banking in an Interest Free Banking System J.KAU: Islamic Economics, Vol. 5 (1993), pp. 25-35 Comments: RODNEY WILSON Professor of Economics Department of Economics University of Durham U.K. The article by Hamid Zangeneh and Ahmad Salam is a welcome departure in the Islamic finance literature, as relatively little has been written about the role of central banks in an Islamic financial system. The authors review the major functions of central banks, and then discuss how monetary tools need to be adapted in an Islamic economy, these including discount rates, open market operations, reserve ratios, refinancing ratios, credit controls, moral persuasion, profit sharing ratios and exchange rates. The authors cite an earlier paper by Mohammad Nejatullah Siddiqi who has probably given more consideration to the issues than anyone else. (1) One of Siddiqi's main concerns is the central bank's role as lender of the last resort, as it is ultimately responsible for safeguarding the interests of depositors, whether the system is conventional or Islamic, although arguably in an Islamic economy it is not so much a matter of consumer rights, but rather of moral responsibility to Muslim depositors who have entrusted their savings to an Islamic bank in good faith. Although the authors quote Mohammad Uzair when discussing the tools of central banking, (2) Sidjqi has looked at these...

Words: 5615 - Pages: 23

Premium Essay

Islamic Bank

...paper focuses on the prospect and growth potentials of Islamic banks in Bangladesh as perceived by Islamic and conventional bankers. The study noted that there is a high demand for interest-free banking services from a segment of people in Bangladesh who have a strong desire to abide by the rules and principals set by Shariah. Along with religious requirement, economic exigencies provide a new outlook to the role of banking in promoting investment/ productive activities, influencing distribution of income and adding stability to the economy. The Islamic banking sector is, however, criticized on several grounds by the Conventional bankers. The banks are believed not to apply the rules of Shariah completely. Islamic banks are said to include interest in their dealings to compete effectively with the Conventional banks. Moreover, conventional banks offering Islamic banking as a parallel service are thought to do so only to add to their profitability, by attracting people who value the Shariah based system by enjoying the advantages of the special treatments from the Central bank. According to the survey, suitable and supportive legal framework would facilitate better growth of this sector. Moreover, the lack of an inter-bank money market and sufficient supportive and link institutions in the sector, act as impediments to growth of Islamic banking. Also, banks perceive the availability of training and education on Islamic banking to be inadequate in Bangladesh. To deliver superior services...

Words: 1256 - Pages: 6

Premium Essay

Articles

...Loyalty: Perception of Muslim Customer Sharia Banking Asia-Pacific Management and Business Application 1(1) 69 – 80 ©UB 2012 University of Brawijaya Malang, Indonesia http://apmba.ub.ac.id Sunaryoa* Zakaria Baharib a Management Department, Faculty of Economics and Business, University of Brawijaya, Malang, Indonesia; b Center for Islamic Development Management Studies, School of Social Science, Universiti Sains Malaysia, Malaysia Abstract The majority of the Indonesian population is Muslim, in which the share of Sharia Banking is only three (3) percent of the total banking market share in the country. This indicates a low participation, possibly leading to a negative perception on ethic reputation and low awareness among the Muslim communities in using sharia banking products and services. The objectives of this paper are to analyze the influence of sharia banking organization ethics reputation on Muslims customer loyalty and to analyze the role of satisfaction as a mediating effect on sharia banking organization ethics reputation on Muslims customer loyalty for the sharia banking products and services. Survey with 315 respondents in the city of Malang, Indonesia was conducted to gather information to further understand the situation, to answer the questions raised and to meet the study objectives. Purposive sampling was used to select the relevant respondents. The Structural Equation Model (SEM) is used to analyze the direct and indirect relationship between sharia banking organization...

Words: 5693 - Pages: 23