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An Exploratory Study on Customers’ Selection in Choosing Islamic Banking

Author

Listed:
  • Mahiswaran Selvanathan
  • Dineswary Nadarajan
  • Amelia Farzana Mohd Zamri
  • Subaashnii Suppramaniam
  • Ahmad Muzammir Muhammad

Abstract

Islamic banking industry is growing very rapidly by offering high quality schemes where free interest and better customer services are provided. Strong Islamic banking movements is forcing the industry to come up with new strategy to compete the market. The purpose of this study is to determine and identify the factors that influence the consumers to choose Islamic bank products or services. Data is collected using non probability simple random sampling around Selangor area. The analysis shows that bank reputation, religious and cost benefit factors are significant which influence customers’ selection on Islamic banking. Bank reputation and cost benefit has positive relationship on choosing Islamic banking. Convenient is not significant factor of influence customers’ selection on choosing Islamic banking. As a conclusion, the study prove that religion shows negative relationship on choosing Islamic banking. This shows that religion is not the main factor but the risk of selecting a bank is important.

Suggested Citation

  • Mahiswaran Selvanathan & Dineswary Nadarajan & Amelia Farzana Mohd Zamri & Subaashnii Suppramaniam & Ahmad Muzammir Muhammad, 2018. "An Exploratory Study on Customers’ Selection in Choosing Islamic Banking," International Business Research, Canadian Center of Science and Education, vol. 11(5), pages 42-49, May.
    • Handle: RePEc:ibn:ibrjnl:v:11:y:2018:i:5:p:42-49
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    References listed on IDEAS

    as
    1. Sehrish Rustam & Saiqa Bibi & Khalid Zaman & Adeela Rustam & Zahid-ul-Haq, 2011. "Perceptions of Corporate Customers Towards Islamic Banking Products and Services in Pakistan," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 14(41), pages 107-123, September.
    2. Jasim Al‐Ajmi & Hameeda Abo Hussain & Nadhem Al‐Saleh, 2009. "Clients of conventional and Islamic banks in Bahrain," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 36(11), pages 1086-1112, September.
    3. Hasan, Syed Akif & Subhani, Muhammad Imtiaz & Osman, Ms. Amber, 2012. "Consumer Criteria for the Selection of an Islamic Bank: Evidence from Pakistan," MPRA Paper 40384, University Library of Munich, Germany.
    4. Siddique, Md. Nur-E-Alam, 2012. "Bank Selection Influencing Factors: A Study on Customer Preferences with Reference to Rajshahi City," Asian Business Review, Asian Business Consortium, vol. 1(1), pages 80-87.
    5. Asma Abdul Rehman & Omar Masood, 2012. "Why do customers patronize Islamic banks? A case study of Pakistan," Qualitative Research in Financial Markets, Emerald Group Publishing Limited, vol. 4(2/3), pages 130-141, August.
    6. Zeyad Saleem Ramadan, 2013. "Jordanian Criteria for Islamic Banks Selection. Evidence from the Jordanian Banking Sector," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 3(3), pages 139-145, July.
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    Cited by:

    1. Shariq Mohammed & Zaroug Osman Bilal & Mohammad Shahfaraz Khan, 2022. "A Study of Awareness of Islamic Banking in Oman," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 11, July.
    2. Daniel K. Maduku & Steven Mbeya, 2024. "Understanding family takaful purchase behaviour: the roles of religious obligation and gender," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 29(2), pages 440-458, June.

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    More about this item

    Keywords

    bank reputation; convenient; religious value; cost & benefit;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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