A COMPARATIVE ANALYSIS OF BANKERS' PERCEPTION ON ISLAMIC BANKING IN PAKISTAN

This research was conducted to gauge the perceptions of employees, in both Islamic banks and conventional banks, of Islamic products and services, the training and experience gained in Islamic banking, and the potential of Islamic banking in Pakistan. Questionnaires dealing with Islamic banking were distributed to bankers in the northern part of Pakistan. The results revealed that bankers in Islamic banks have more positive perceptions on the above issues. Interestingly, few of the bankers possessed a relevant academic background or relevant experience in Islamic banking before embarking on this career. The bankers also claimed that they had very limited knowledge in this area prior to working with the banks; thus, the issue of the availability of well-trained and skilled employees must be addressed critically by the government, industry players and educationists for the sustainable growth of Islamic banking in Pakistan Islamic banking industry has appeared as one of the fastest growing sector over the last three decades. It has extended to all places of the world and gained extensive identification by Muslims and non-Muslims. Islamic banks present the similar functions as banks do in the conventional system, except that the Islamic Banks carry out their transactions in accordance with Islamic rules. As one of the most important players in service industry today, Islamic banking is no longer considered as a business entity only to carry out the religious duty of Muslim community, but also fulfil the need of non-Muslims by offering more products. This requires Islamic banks to identify with the perceptions of customers towards them in terms of service quality and other benefaction factors to secure customers loyalty. In Pakistan, customer’s optimistic observation towards Islamic banking is crucial mainly due to the fact that Islamic banks have to compete with the conventional banks in a dual-banking system. Pakistan has a dual banking system, whereby the Islamic banking system operates in parallel with the conventional system. In Pakistan currently 51 banking institutions are running their operations, encompasses five Islamic banks and 46 conventional banking institutions out of which 15 conventional banks also running Islamic windows.