Understanding Islamic Banking: The Perception and Thoughtfulness of Customers about Islamic Banking in the Context of Balochistan

By Jameel Ahmed, Safia Bano, Lubaina Dawood

Abstract

Islamic banking systems have been established and getting popularity not only in Muslim majority countries (Bahrain, Malaysia and Pakistan) but also in non-Muslim countries such as UK, France, China, Singapore (Ariff, 2014; Shahzad etal, 2014). The growth of the Islamic banking system is highly influenced by different factors such as level of customer awareness, acceptance patterns, religious perception, and/or preferences and economic system (Salehi and Khaksarastaneh, 2015). The aim of present research is to explore the level of understanding among customers of Islamic banking in Quetta-capital city of Balochistan. As the inclination of Islamic banking throughout the world is increasing day by day, but the growing trend of Islamic banking does not signify that people do have complete information and understanding of the basic principles of Islamic banking.  Present inquiry is informed by qualitative research approach and nature of study is inductive. Qualitative interpretive tradition allows the study to construct the knowledge by including the voice of subjects of this study. In this regard semi-structured interviews were conducted from a sample of twelve account holders of Islamic banks (operating in Quetta), containing the questions relevant to the basic concepts and the functions of the Islamic banks. The results indicate that citizens are interested to be a part of Islamic banking due to religious factor, personal interest, personality influence, reference groups, contribution to social welfare, faith in its name “Islamic banking” and trust in “Shariah board” (governing its functions) but these factors do not indicate the understanding of customers regarding basic principles of Islamic banking.