Literaturereview Another studywas conducted by Naeem Akhtar, Muhammad Toqeer Mehmood and Muhammad Zeeshan Pervez in Pakistan (2016).The results shows that customers have positive attitude towards Islamicbanking. In Pakistan the growth of Islamic banks based in customers perceptionand perception of customers are solely depend on knowledge and awareness ofproduct and services, Islamic teachings, advertisement and network. Themajority of the people are agree to deposit their saving in Islamic banking ifIslamic banking provide good profit as compared to conventional banking(Faisal, 2012).
This study isalso find that strict Islamic religion and element of cost and profit effect onthe adoption of Islamic banking product and service (Anwar, 2014). The religionhas a direct impact on the perception of customers in Islamic banking While, Muhammad AsharAsdullah and Hassan Yazdifar In the study of” Evaluation of factors influencingyouth towards Islamic banking in Pakistan” (2016).They analyse that differentcustomers have different perception and reason to select the Islamic banking.The majority of customers select the Islamic banks due to Islamic teachingswhile only 12% from the total respondent select the Islamic banks just becauseof their family and friends and only 16% from total respondent prefer Islamicbanks because it provide the services on the time as well as they think fair servicesprovided by Islamic banking.so it could be summarized that religious teachingis not only factor that influence the customers towards Islamic banking. Thereare also others factors such as better services and influence of family andfriends that attract the young customers towards Islamic banking. AnanFathi Srouji, Mohd Suberi Ab Halim, ZulkarnainLubis, Madher Ebrahim Hamdallahanalyse the determinants of bank selection criteria’s inrelation To Jordanian Islamic andconventional banks(2015).They find that the religious motives was the main factor that affect thecustomers towards Islamic banking.
Although bank convenience, and bank reputation and imageswere positively significant for both type of banks. While on the other hand, Kumajdi Yamirudeng in “Factors Influencing Selection of IslamicBanking in Thailand” (2013).They find out that the baking business based on thetrust. They find out the confidence as mediating variable which can help tostrengthen the customers’ decision to select Islamic banking in Thailand The findings imply that Islamic banksshould emphasize on efforts to gain customers’ confidence through better Sharia governance, human resourcedevelopment, knowledge dissemination and promotions to ensure customers selectIslamic bank as their principal bankerthe customers decision to select the Islamic banking in Thailand. Furthermore,Muhammad Imtiaz Subhani , Syed Akif Hasan , Muhammad Fayzan Rafiq , MuhammadNayaz , and Amber Osman in the article of “Consumer Criteria for the Selection of an Islamic Bank: Evidence fromPakistan”(2012) identify that that high profit and low service charges matters themost for selecting Islamic banks by consumers While, religious motives also matters for selecting Islamicbanks.Cunningham and Gerrard (2001)believed that the Service quality can be an influencing factor for selectingIslamic banks while the same is concluded by Awan and Bukhari (2011); Al-Ajmi,Al-Saleh, and Hussain (2009) in their research findings. Furthermore, Asma Rashidah Idris, Khadijah Nik MuhammadNaziman and Siti Sarah Januri (2011) provide an evidence that religious valueis most influencing factor in adoption of an Islamic banking. The religiousvalue defined as which is free from riba and not include those transactionswhich are against the laws of sharia.
The study also reveal that there are alsosignificant factors such as; ATN services, financial securities and costbenefit . It is to be concluded that, even thoughthere are a lot of determining factors the religious value practised by theconsumers plays a vital role in influencing them to patronize Islamic banking.But the limitation is that most of customers are not aware about the benefitsand financial products of Islamic banking. Another study conducted in Pakistanby Kun-ho Lee and Shakir Ullah about customer’s attitude towards Islamicbanking (2011).
The study revealed that most of the customers of Islamic banksconsidered banks as Islamic business entity so they expect that banks should becompliance with sharia principle. Those Islamic banks which repeatedly violatethe Islamic laws are main cause of customers to switch the bans. On the otherside convenient facility and advanced technology that provide safety tocustomers for their capital are second most important factors to choose thebank.
However, Ahasanul Haque,Jamil Osman and Ahmad Zaki Hj Ismail observed in(2009) “Factor Influences Selection of Islamic Banking: A Study on MalaysianCustomer Preferences” that there is significant and positive relationship ofquality of services, availability of services, social and religious perspectiveand confidence in bank with customers’ perception about Islamic bank. Thesefactors are expected to have great role for influencing customer mind. Jasim Al?Ajmi,Hameeda Abo Hussain, Nadhem Al?Saleh were conductthe study on “Clients of conventional and Islamic banks” in Bahrain (2009).Theyanalyse that Islamic religious belief and social responsibility are the twomost important factors that help in selection of bank. Cost benefit is alsoconsidered third important factor in bank selection. Clients of conventionaland Islamic banks share a number of motives, but they differ significantly on afew motives in relation to bank selection; and clients of Islamic banks aremore familiar with the products/services that conform to the sharia. Overall,for clients who bank exclusively with Islamic banks, and for those who bank indifferent kinds of banks, the most widely used product/service of Islamic banksis murabaha.
Nor’Azurah Md. Kamdari, Remali Yusoff, and Shaherah Abdul Malik conducted the studyin Malaysia (2007). They found out that there is a significant relationshipbetween stakeholders’ selection with religion in selecting Islamic bankingservices offered by BIMB or conventional banks in Malacca. They also analysethat reputation and image are considered major factor for selection of Islamicbaking. As the Islamic baking based on sharia compliance the people in Malaccaperceived that Islamic banking transactions are based on ethics and onactivities which are socially acceptable which boost the image and reputationof Islamic banks in minds of customers. Kamal Naser, Ahmad Jamal, Khalid Al?Khatib,(1999) provide evidence that people choose the Islamic banks based on theirreputation and image in the minds of customers.
the same findings were alsodefined by Erol and El-Bdour (1989) and by El-Bdour et al. (1990).theseresearchers also told that customers adoption of Islamic bakes depend on its reputation,image and confidentiality.
The finding also suggest most ofpeople choose Islamic banks because of religious factor and sharia compliance.As Islamic banks operate accordance to the Islamic teachings which help thebanks to maintain the good reputation among people and clients. On the otherhand those conventional bank which solely work for profit get little supportfrom respondents.