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Exploring Service Quality in Islamic Banking Industry of Afghanistan: An Analysis of Customer Satisfaction

Author

Listed:
  • Abdullah Zubair
  • Hamid Hasan

    (International Islamic University Islamabad, Pakistan.)

Abstract

Theoretical framework:Service quality (SQ) is a required organizational component that positively relates tocustomer satisfaction (CS). Objective: In this paper, we measure service quality (SQ) of Afghanistan's Islamic banking industryand customer satisfaction (CS).Model/Methodology:We use the modified CARTER model in our study to analyzethe data through PLS-SEM by using the Smart PLS 3.2.9 software package.Data:We collected data in Kabul province from customers of the following banks: Afghanistan International Bank (AIB), Afghan United Bank (AUB), Bank-e-Millie Afghan (BMA), Ghazanfar Bank (GB), and Islamic Bank of Afghanistan (IBA). Findings:In a nutshell, our study results reveal that in the Islamic banking industry of Afghanistan out of seven dimensions of service quality (SQ) only four dimensions are significant namely,compliance (COM), reliability, empathy (EMP), responsiveness (RES) while the other three dimensions namely; assurance (ASR), tangibles (TAN), and corporate social responsibility (CSR) are insignificant for the customers of Islamic banking in Afghanistan. Policy implications:Our study suggests that Afghanistan's Islamic banking industryneeds improvement in innovative products and services with their pricing and designing policies. Similarly, Afghanistan's Islamic banking industryneeds to determine fair profit ratio for bank management, make comfortable required conditions and terms in the agreement with customers, and takea fair commission on services. Practical implications:This research will help Afghanistan's Islamic banking industryadjust and design their operational and managerial policies.

Suggested Citation

  • Abdullah Zubair & Hamid Hasan, 2020. "Exploring Service Quality in Islamic Banking Industry of Afghanistan: An Analysis of Customer Satisfaction," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 2(2), pages 73-97, December.
    • Handle: RePEc:ani:irdjoe:v:2:y:2020:i:2:p:73-97
    DOI: https://doi.org/10.52131/joe.2020.0101.0018
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    References listed on IDEAS

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    More about this item

    Keywords

    Service quality; Customer satisfaction; Islamic banking; CARTER;
    All these keywords.

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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