Influencing factors on the selection of Islamic Banking; a study on customer preference in Batticaloa District.

Abstract

The emergence of strong Islamic movements in the last three decades has generated a I chewed interest in Islamic economics, especially in Islamic interest-free banking. (‘currently, Islamic banks are strategically offering high-quality products and services to satisfy their customers due to the strong competition. ‘The concept of Islamic banking in Sri Lanka is relatively new. There was a need to know is to how the Islamic banks are penetrating into the Sri Lankan financial market and competing head-on with conventional banks for the same customers. Since Sri Lanka has multi ethnicities and different cultural backgrounds, what are the factors influencing the selection of Islamic banking products and services? Even though there are many conventional banking products and services why the customers are giving preference in the selection of Islamic banking products and services? Which factors are influencing the selection of Islamic banking whether the quality of service or high profit & low service charges, religious beliefs, or availability of service? atc chose nen se he-purpose. of this study.was to investigate major factors that influence the selection -. «of Islamic banking in the Batticaloa district. Descriptive and correlational survey designs were used, a self-administered questionnaire was carried out on respondents to collect the raw data. This considered a sample of one hundred ninety-three respondents who were Islamic banking customers from Batticaloa district using non-probability sampling. The findings revealed that availability of service was the number one cited factor influencing customer preference in the selection of Islamic banking, followed by quality of service, religious belief, and high profit & low service charges respectively. When. customers were influenced by religious belief they did not much care about the high profit that could be earned by dealing with conventional banking. At the same time, most of the existing customers of Islamic banks were the customers of conventional banks. BR Tha study recommends that Islamic banks should consider fulfilling all the banking needs of the customer by providing all kinds of services and should remain highly dedicated to Islamic principles in order to retain the customers and survive in the market.