Factors that Influence Customer to opt Islamic Banking

Influencing Factors to Adopt Islamic Banking

The banking industry plays a pivotal role in shaping the economies of countries and, consequently, the lives of the general public. King Abdulaziz University organized the First International Conference on Islamic Economics in Makkah at the start of 1970, and it was followed by the establishment of the first commercial Islamic Bank, Dubai Islamic Bank (DIB), in the United Arab Emirates, followed by the establishment of the International Islamic Development Bank (IDB) in Jeddah, Saudi Arabia, and the many private and semi-private commercial Islamic banks that were established after that in Egypt, Sudan, Kuwait, Bahrain, and Pakistan (Al Nasser & Muhammed, 2013)The reasons and rationale for adopting Islamic banking cannot be understood merely by looking into theoretical and empirical dimensions; rather, we have to add a third dimension, which is faith. Muslim societies derive their laws according to principles laid down in the Quran and Sunnah, there are certain verses of the Quran that vividly declare Riba (Usury) or interest as Haram (sinful act for believers). (Riba (Usury) : Permissible or Forbidden in Islam? | Islam, n.d.). Besides that, there are several sayings (aḥādīth) of the holy prophet (PBUH) which severely forbids taking, giving or even recording Riba. n his paper “The Theory of Planned Behavior”, (Ajzen, 1991), said that planned behavior is a helpful theoretical framework for dealing with the complexities of human social behavior. These concepts allow us to forecast and comprehend particular behaviors in specific contexts. (George, 2004) in this study, it was examined and proved that those who believed in the dependability of the Internet based on personal skills to buy online were more likely to make Internet purchases than were those without such beliefs. In another study particularly taken in the context of Islamic banking by (Echchabi & Aziz, 2012), was found to have a substantial effect on subjective norms, with particular reference to the parents, siblings, peers, and colleagues, as the main referent groups. According to (Bananuka et al., 2020) the theory that was developed by E.M. Rogers in 1962, is one of the oldest social science theories and is known as the Diffusion of Innovation (DOI) Theory. It explains, how, by the passage of time, an idea or product gains momentum and diffuses (or spreads) through a specific population or social system. When innovations are introduced in society called the diffusion of innovations, things are spread through diffusion including ideas, values, concepts, knowledge, practices, behaviors, materials, and symbols. This theory has four important elements: innovation, communication channels, time, and social system.


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