Islamic Finance in the Global Economy, by Ibrahim Warde. Edinburgh, Scotland: Edinburgh University Press, 2000. 252 pages. Notes. Gloss. Index. $90. Reviewed by Clement M. Henry Ibrahim Warde has written a forthright and scholarly survey of a subject that deserves the attention of both international bankers and area specialists who are interested in Islamic culture or political economy. Islamic Finance in the Global Economy documents the evolution of Islamic banking over the past quarter of a century, from the go-go era of abundant oil revenues that readily supported a new commercial adventure to the current decade of accelerated globalization, especially of financial institutions. It offers a much-needed introduction to a highly complex set of economic, cultural, and political phenomena. Dr. Warde's definition of Islamic financial institutions is that they be "based, in their objectives and operations, on Koranic principles." Typically they will have a religious board that decides what is properly Islamic, although Warde notes that there are exceptions and that "no definition.. is entirely satisfactory" (p. 5). Throughout his survey, the author is at pains to emphasize that Islam admits of many interpretations, that Islamic banking should not be confounded with Islamist politics, and that political Islamism comes in many shapes and forms. He cites Aziz al-Azme's "Islams" approvingly (p. 17) but, perhaps for the benefit of his banker readers, devotes more space than they deserve to criticizing journalists like Steven Emerson who conjure up pictures of terrorism and money-laundering (pp. 218, 222). Warde himself has an excellent command of the serious literature on political Islam, including scholars like Olivier Carre, who should be better known in the United States. References to Richard Bulliet and Ernest Gellner might have further enriched his discussion of contemporary Islamism and its possible convergence with economic liberalism. After an initial take-off in the late 1970s and early 1980s, Islamic banks stagnated. Declines in oil revenues, coupled with a financial crisis in Kuwait, put many of these new banks at risk. Unlike the anti-Islamic propaganda of the popular press or the equally uninformative apologetics written by dedicated Islamists, Warde frankly discusses issues of Islamic "moral hazard" and financial mismanagement that have plagued a number of these institutions. Host governments have been obliged to bail out a number of them, including the Kuwait Finance House in 1984, the largest Islamic bank at the time, and, in 1998, the most venerable of them, Dubai Islamic Bank, which was founded in 1974. Despite their growing pains and although oil revenues stagnated until quite recently, after this book went to press, Islamic financial institutions got a second wind (or "aggiornamento" as the author calls it) with the intensified pressures on the region to integrate into the global economy. As times became more difficult, with the poorer, heavily indebted countries in the region obliged to engage in financial structural adjustment, Islamic financial institutions paradoxically took off once more. Warde highlights the congruence between the new international financial environment and these culturally specific banks. …

Islamic Finance in the Global Economy

Banks must meet the needs of their customers in order to achieve sustainable development. The aim of this paper is to examine service quality dimensions, by using the modified SERVQUAL model, which can be used to measure customer satisfaction, and the effect of these dimensions (tangibles, responsiveness, empathy, assurance, reliability, access, financial aspect, and employee competences) on customer satisfaction in Jordanian banks. Data were gathered from 825 customers in the Jordanian banking sector. The sample data were statistically analyzed through exploratory factor analysis by the SPSS program to determine service quality perception and customer satisfaction. The results illustrate that the modified SERVQUAL Model extracted four subscales in the new model instead of eight in the initial model. The first subscale contains four dimensions—assurance, reliability, access and employee competences. The second subscale consists of two dimensions—responsiveness and empathy. The third and fourth subscales—financial aspect and tangibility—are separate factors. Further studies should consider the dimensions of access, financial aspect, and employee competences as essential parts of service quality dimensions with the other subscales, so as to improve wider customer satisfaction in the banking sector. In the authors’ opinion, the modified SERVQUAL model is useful for addressing customer satisfaction in the banking sector.

The Service Quality Dimensions that Affect Customer Satisfaction in the Jordanian Banking Sector

Handbook of Islamic Banking

Islamic Financial Systems

Purpose




This study aims to explore the awareness and willingness of Muslim Indians toward Islamic banking. Subsequent to financial crises during the past few decades, Islamic banking has attained global acceptance and has gained a momentum in emerging economies as a substitute for the conventional (interest-based) banking. As India ranks third in terms of Muslim population globally, it is quite spontaneous to analyze the concept of Islamic banking in an Indian perspective.




Design/methodology/approach




To collect data, adopting purposive sampling, a sample of 290 Indian Muslims was surveyed in Delhi National Capital Region of India using a self-structured questionnaire. Appropriate statistical tools were applied to analyze the data.




Findings




The results concede that majority of the respondents lack an understanding of how Islamic banking works. The results further concede that majority of the respondents are willing to go for Islamic banking if informed properly and offered better customer experience. The results suggest that Islamic banking organizations need to frame effective communication strategies to increase awareness among the populace about how Islamic banking operates.




Practical implications




If approached strategically, one would expect India to be a huge market for Islamic banking. By offering a preliminary understanding about the awareness and willingness of Indian Muslims, this study can prove helpful for organizations to design and deliver informative advertising campaigns to inform potential customers about Islamic banking operations and to ensure the ability to provide efficient service before starting the operations in any country for the first time.




Originality/value




By exploring the awareness and willingness of Indian Muslims, the current study takes an important research gap into account and, therefore, enriches the existing Islamic banking literature.

Awareness and willingness towards Islamic banking among Muslims: An Indian perspective

The purpose of this paper is to find out the importance of the tag “Islamic” in the title of banks. This will help to determine the future strategy of Islamic banks, while expanding to the countries where Islamic banking is seen as a religious banking and not an as an alternative approach to the conventional banking.,Adopting convenience sampling, a total of 596 customers of both Islamic and conventional banks were surveyed from four regions of Saudi Arabia (Makkah, Madinah, Riyadh and Dammam) using a self-structured questionnaire on a five-point Likert scale.,The results concede that Islamic banks without the tag “Islamic” and conventional banks have same customer satisfaction. There are some factors other than the tag “Islamic” which are driving customers towards Islamic banking. Those factors include physical aspects of the bank, level of satisfaction with the services, dealing and attendance by the staff and safety and security of the bank. Besides, the application of fundamental principles of Islamic banking works as a key motivation for customer satisfaction with Islamic banking.,Applying the tag “Islamic” is not as important as implementing the principles of Islamic banking. Islamic banks can survive and compete well even without using the “Islamic” tag if they implement the prime principles of Islamic banking and work on improving the factors highlighted by this study. This study can prove to be helpful in the expansion of Islamic banking in the countries where religious banking is not generally preferred by customers.,This is the first study to find out the customer satisfaction in a dual banking system (comprising of conventional banks and Islamic banks that do not use the tag “Islamic”), thereby filling the existing gap in the Islamic banking literature.

Does the tag “Islamic” help in customer satisfaction in dual banking sector?

Islamic banking is gradually emerging everywhere in the world. Half a century ago, Islamic banking was just a concept contained in books only, but today it is a success story not only in Muslim countries of Middle East but even in the UK and the USA. As customer satisfaction is the compulsory element of every kind of business so Islamic banking also has to pay more attention towards customer satisfaction. Modern banking system of Saudi Arabia is unique due to political and technological environment of this country. Both conventional and Islamic banks are working together in this country to maximize the customer satisfaction and profit margin. Customers have a choice to switch either type of banking (Islamic to conventional or conventional to Islamic); this has created a challenge for banks. To retain and attract the customers, banks have to adopt different services and strategies. In the present study, the level of customer satisfaction in both conventional and Islamic banks is measured through comparative study. Data were collected through a well-designed questionnaire on Likert’s five point scale from both Islamic and conventional banks of Saudi Arabia. Data were collected from four regions (Riyadh, Dammam, Makkah and Madinah) with the intention to represent the whole Saudi Arabia.  After using independent samples t-test and one way ANOVA, it has been found that customers are equally satisfied with both types of banks and also no difference of customer satisfaction was found from different regions. This is a good sign for Islamic banking as it is competing with a conventional banking system which has its long history. At the end suggestions for developing Islamic banking in Saudi Arabia were presented. Keywords : Islamic Banking; Saudi Arabia; Customer Satisfaction; conventional and Islamic banking; ANOVA JEL Classification: G2

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Comparative Analysis of Customer Satisfaction towards Islamic and conventional banking: An empirical Study from Saudi Arabia.

As the aftermath of globalization and banking technology advancements, service quality has sought the intense value from the competing banks to ensure customers’ loyalty and avoid customers’ run-off risk. Of course, Islamic Banks seek no exceptions here. Islamic Banking exists either in the form of full-fledged Islamic banks or as Islamic Banking windows in the conventional banks. With an on-going discussion among policy makers to determine which type of these is better to be implemented, scarce literature is available in terms of the comparative studies between the two and also with regard to comparative service quality. Hence our study is the first one to compare these two types of Islamic banks with reference to their service quality. SERVQUAL model has been employed to analyze the service quality of these two types of Islamic Banks in Pakistan. Results yields a better image about full fledge Islamic banks, as perceived by their customers. Nonlinear classification techniques reveal that expectation of tangibles, empathy, and responsiveness are the most significant constructs that distinguish Islamic banks with respect to service quality.

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Customer Satisfaction in Full-Fledged Islamic Banks and Islamic Banking Windows: A Comparative Study

Islamic finance has faced a two-fold criticism from scholars; viz. constructive criticism and destructive criticism. Majority of the scholars criticize it with the intention to improve its overall development, but some scholars are more negative in their criticism. This paper proposes that Islamic banks (a component of Islamic finance) are not charitable institutions, but are the intermediary institutions that take care of investors’ expectations to keep the time value and return to their investments intact with the market fluctuations. The purpose of this paper is to provide better insight about Islamic finance so as to further improve this industry to achieve its long term goals and serve the society better. The paper also attempts to answer some of the common allegations imposed by scholars towards Islamic finance.

/pdf/islamic-finance-more-expectations-and-less-disappointment-26sain0udr.pdf

Islamic finance: more expectations and less disappointment

In the straitjacket world of Indian banking, something as fascinating as Islamic banking is a distant dream. Nonetheless, countless advocates of Islamic banking have been trying their best over the years to propagate the concept. India has 14 percent Muslims population which is more than the Muslim population of Bangladesh, turkey, Egypt, Iran, Nigeria, Afghanistan, Sudan, Iraq, Saudi Arabia etc But there is no any full fledged Islamic bank currently working in this country. Reserve Bank of India and other legal institutions of India are not issuing license to banks to work as per the principles of Islamic banking. Necessary measures are, however, being taken by India Government for the same. The present study is taken to explain how Islamic banking is better for India while taking the SWOT analysis and Michael Porter’s five forces model. It also explains how Islamic bank can commence in India by suggesting necessary measure for the same.

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Fayaz Ahmad Lone

Papers

Does the tag “Islamic” help in customer satisfaction in dual banking sector?

Comparative Analysis of Customer Satisfaction towards Islamic and conventional banking: An empirical Study from Saudi Arabia.

Customer Satisfaction in Full-Fledged Islamic Banks and Islamic Banking Windows: A Comparative Study

Islamic finance: more expectations and less disappointment

Islamic Banking in India: What More Needed?