Islamic Banking Products, Services and Objectives

A Comprehensive Analysis of Stakeholders’ Opinions

Abstract

Purpose

Islamic banking (IB) paradigm proved itself a reckoning force in Pakistan, by consistently progressing over the last two and a half decades reflecting that the IB model has sustained itself by ensuring the interests of various stakeholders. As stakeholders constitute an integral element of success of any initiative, this research study aims to assess the perspectives of various stakeholders regarding Islamic banking in Pakistan, encompassing important aspects including Islamic banking products and offerings as well as the objectives of Islamic banking evaluated from the viewpoint of four key Islamic banking stakeholder groups including Islamic banking customers and conventional banking customers, Islamic bankers and conventional bankers.

Methods

The study was undertaken adopting the quantitative research philosophy and the data was collected through a survey-based research design, involving 1200 respondents who are asked to provide their feedback on a structured questionnaire to eventually evaluate and assess their opinions regarding Islamic banking objectives, products and services.
Results

The results reflected diverse viewpoints of the respondents from the four IB stakeholder groups. The research participants from Islamic banking domain had generally more favorable perceptions towards the Islamic banking products and practices while the research participants from conventional banking background had somewhat lesser approving feedback. The respondents were generally optimistic about the IB system and postulated promising prospects for the Islamic banking sector in Pakistan.

Novelty

The study is unique in the sense that it takes into consideration the opinions of both sides of Islamic banking industry i.e., the supply side by involving Islamic bankers as well as the demand side comprising the existing Islamic banking customers as well as prospective customers from conventional banking domain. Furthermore, the study also includes the percepts of prospective employees i.e., conventional bankers who, being from competitor conventional banks are in fact indirect stakeholders of Islamic banking and are significant according to the stakeholder theory. The paper by taking into consideration the opinions of IB sector’s several key stakeholder segments in a single study, endeavoring to address a vital research gap.