Awareness and willingness towards Islamic banking among Muslims: An Indian perspective

Abstract

Purpose This study aims to explore the awareness and willingness of Muslim Indians toward Islamic banking. Subsequent to financial crises during the past few decades, Islamic banking has attained global acceptance and has gained a momentum in emerging economies as a substitute for the conventional (interest-based) banking. As India ranks third in terms of Muslim population globally, it is quite spontaneous to analyze the concept of Islamic banking in an Indian perspective. Design/methodology/approach To collect data, adopting purposive sampling, a sample of 290 Indian Muslims was surveyed in Delhi National Capital Region of India using a self-structured questionnaire. Appropriate statistical tools were applied to analyze the data. Findings The results concede that majority of the respondents lack an understanding of how Islamic banking works. The results further concede that majority of the respondents are willing to go for Islamic banking if informed properly and offered better customer experience. The results suggest that Islamic banking organizations need to frame effective communication strategies to increase awareness among the populace about how Islamic banking operates. Practical implications If approached strategically, one would expect India to be a huge market for Islamic banking. By offering a preliminary understanding about the awareness and willingness of Indian Muslims, this study can prove helpful for organizations to design and deliver informative advertising campaigns to inform potential customers about Islamic banking operations and to ensure the ability to provide efficient service before starting the operations in any country for the first time. Originality/value By exploring the awareness and willingness of Indian Muslims, the current study takes an important research gap into account and, therefore, enriches the existing Islamic banking literature.

Exploring the Impediments Faced by the Banking Customers to Adopt Islamic Banking Services in Pakistan

“…Consumers may lack basic financial literacy owing to a lesser marketing activities of banks, which preclude customers to obtain financial services (e.g., Kempson & Whyley, 1999). It has been shown by various researches that customers awareness has a significant impact on their intention and attitude to use Islamic banking services (Bodibe, Chiliya, & Chikandiwa, 2016;Islam & Rahman, 2017;Thambiah, Eze, & Ismail, 2011). But Islamic banking customers commonly lack information regarding Islamic banking system (Islam & Rahman, 2017).…”

“…It has been shown by various researches that customers awareness has a significant impact on their intention and attitude to use Islamic banking services (Bodibe, Chiliya, & Chikandiwa, 2016;Islam & Rahman, 2017;Thambiah, Eze, & Ismail, 2011). But Islamic banking customers commonly lack information regarding Islamic banking system (Islam & Rahman, 2017). Karim and Affif (2005) in their study regarding Indonesia found that prospective customers lack information regarding Islamic banks products and services due to they view it non-beneficial to adopt Islamic banking services.…”

An Awareness Model for an Islamic Pre-Need Funeral Plan

“…The level of awareness among consumers regarding pre-planning funeral arrangements in the USA is low (Kemp and Kopp, 2010;Lambert, 2016). Awareness on Islamic products other than IPFP was reported in the literature, such as awareness of takaful (Coolen-Maturi, 2013) and Islamic banking (Ul Islam and Rahman, 2017). However, awareness of IPFP has been neglected in the literature even though awareness is a prerequisite for the success of a product/service.…”

Islamic finance: more expectations and less disappointment

“…It was a concept in books and giving it a practical shape was difficult because people were not sure of its success. But with the success of first modern Islamic bank, i.e., Dubai Islamic bank in 1975 (Lone et al, 2017), many Islamic banks were started in different countries in the world (Islam and Rahman, 2017). Today maximum numbers of Islamic banks are operating in Malaysia which has become the hub of Islamic finance.…”