Consumer Behaviour Towards the Islamic Banking – “Customer Satisfaction with Islamic Marketing Ethics and Islamic Banking Industry

Topics: Islamic banking, Bank, Sharia Pages: 18 (6566 words) Published: October 14, 2012
In this current era, businesses play the most important role in developing a country’s reputation. It is because a nation’s wealth is determined by concerning on certain aspects as one of it is the economical factor. As far as we know, businesses are the main sectors of a nation where it decides the economical status of a nation. Apart from that, banking operations are also one of the factors which contribute to the economical growth of a country. The main core business of the banking corporation is being a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly or through capital markets. Moreover, a bank also connects the customers that have capital deficits to customers with capital surpluses. 1.1Role of Banking Institutions

In addition, banks also borrow money by accepting funds deposited on current accounts, by accepting term deposits, and by issuing debt securities such as banknotes and bonds. Following to that, banks do lend money by making advances to customers on current accounts, by making instalment loans and by investing in marketable debt securities and other forms of money lending. At the same time, banks also provide almost all payment services, and a bank account is considered indispensable by most businesses, individuals and governments. Non-banks that provide payment services such as remittance companies are not normally considered an adequate substitute for having a bank account. Besides that, banks also borrow most funds from households and non-financial businesses, and lend most funds to households and non-financial businesses, but non-bank lenders provide a significant and in many cases adequate substitute for bank loans, and money market funds, cash management trusts and other non-bank financial institutions in many cases provide an adequate substitute to banks for lending savings too.

1.2Products offered by Islamic Banking Corporations.
Islamic banking offers many products to its customers. * The further explanation of the products below can be viewed in Appendix 1. * Saving Accounts (Al-Wadiah) / trustee
* Current Accounts (Al-Wadiah) / Demand deposit
* Capital Financing (Mudharabah)
* Partnership (Musyarakah)
* Cost plus Profit (Murabaha).
* Leasing (Ijara)
* Interest free loan (Quard E Hasan)
* Hire Purchase (Aitab)

1.3The customers of Islamic Banking Corporations.
However, when we look into the types of banking customers, the list might go as long as it can. But, there are only several types of consumers who were declared as the common customer to the banking corporation. At the first place, the depositors are the main customers of a banking corporation. Depositors are the parties who place their money in a bank account for several reasons. One the main reason is for the safety of their money. Secondly, the investors; who commits money to investment products with the expectation of financial return. The primary concern of an investor is to minimize risk while maximizing return, as opposed to a speculator, who is willing to accept a higher level of risk in the hopes of collecting higher-than-average profits. Apart from that, the shareholders also play their role as the common contributors to the banking corporation. They own shares of stock in a corporation or mutual fund. For corporations, along with the ownership comes a right to declared dividends and the right to vote on certain company matters, including the board of directors and also called stockholder. Further more, the creditors which extend credit to the others are also one of the common banking customers in today’s business world. At last but not least, stakeholders can be considered as the common type of banking customers. Generally, stakeholders are known as any party that has an interest ("stake") in a firm.

1.4Islamic Banking

According to Wikipedia, Islamic Banking is...
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