Islamic Banking Assignment

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Peshawar, Pakistan Objective The following study has been conducted to test and evaluate the effects of factors such as government support, social influence, service facilitation, intention to use, cost effectiveness and religious factors on customer’s attitude towards using Islamic banking in Peshawar, Pakistan. Significance The significance of the context is that it is useful in estimating how the above mentioned variables affect and drive customers towards Islamic banking, weather a trend towards Islamic banking is increasing in Peshawar, and if conventional banks start working on area of Islamic banking which benefits and rewards can they trigger and how they can in turn benefit economy through an interest free banking system. Islamic banking…show more content…
• H2: Religious Compliance has significant effect on customer’s attitude towards Islamic bank. • H3: Cost Effectiveness has significant effect on customer’s attitude towards using Islamic bank. • H4: Intention to use has significant effect on customer’s attitude towards using Islamic bank. • H5: Government Support has significant effect on customer’s attitude towards Islamic bank. • H6: Service Facilitation has significant effect on customer’s attitude towards Islamic bank. Methodology Primary research has been conducted for the purpose of this study in which 300 customers of different Islamic banks operating in Peshawar were included by means of convenience sampling method. The banks whose customers were part of this research are namely Meezan Bank, Dubai Islamic Bank, Dawood Islamic Bank, and Al Baraka Islamic Bank. The study involves 7 basic variables on which 40 items questionnaire were made. The response rate from the customers was 88.3%. Moreover, to test the correlation/connection and effect of the independent variables of study on customer’s attitude towards Islamic banking regression and correlation analysis/modal was…show more content…
On the other hand it was found that Religious factors, Social influence and Government support, all have insignificant effect on customer’s attitude towards Islamic banking. Therefore, hypothesis 1, 2, and 5 were rejected. Selection of bank is more based on customer’s preference to cost benefit rather than religious factors. While muslims consider social norms and values in making choice between varied financial products and services, non-muslims only make decisions based on the utilization and benefits associated to these. The authors have provided evidence from previous studies that selection of banking system is based purely on customers intention to use certain financial products then whether they be legal or illegal, for although most of the Peshawar based businessmen were not availing banking services because of the interest, yet they were found to be involved in illegal and riskier method of Havala. Service quality also matters highly in the selection of banks and those banks are given preference where staff on the front desks interact and facilitate customers with all the required

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