Research Report

Perceptions About Islamic Banking

Course: Methods in Business Research

Course Code: MKT404

Course Instructor: Ms. Saadiyeh Said

Submitted On: 9th December, 2009

Submitted By: Farhan Zahid (9258)

M. Faizan Ali (9045)
Mahir Murad (8900)
Abdul Latif Dadabhouy (8898)
Peer Ali Rashdi (8870)
1
 LETTER OF AUTHORIZATION

6th December, 2009

Research Project On Perceptions About Islamic Banking

Dear Readers:

As students of methods in business research, we have been authorized by Ms.

Saadiyeh Said to work and make a research report on People’s perceptions about
Islamic Banking.

Working on this report has been a learning experience for our team. The exercise
was suggested by our teacher as a way to help us get first hand experience of the
methodology and problems in conducting a research project.

We hope that this report will give you a broad understanding about the research
topic.

Yours sincerely,

Farhan Zahid
M. Faizan Ali
Mahir Murad
Peer Ali Rashdi
Abdul Lateef Dadabhuoy

2
 EXECUTIVE SUMMARY

This research project was conducted to understand the perceptions of people about
Islamic Banking. The research was also aimed at identifying the number of people who
use Islamic Banking and why do they do so. Before conducting the survey research,
some exploratory research was also conducted. The conclusive survey research was
conducted to find out the above stated objectives. Self-administered questionnaires
were made to answer by the respondents of the selected target audience. In the
sampling design, we selected 120 people who use Banks. The sampling method used
was non-probability sampling. The analysis of the filled questionnaires were done
through a software called Statistical Package for Social Sciences (SPSS)

The results indicated that majority of the people are using conventional banks either
because of low knowledge about Islamic Banking or because of higher interest rates
offered by the conventional banks compared to Islamic Banks.

The recommendations included that the Islamic Banks should convey more knowledge
about their basic principles. Seminars can be conducted to invite people to learn more
about Islamic Banking. The universities can also promote Islamic Banking by offering
majors in Islamic Banking for its Bachelors and Masters programs.

3
 Table of Content
INTRODUCTION.........................................................................................................................5
BIBLIOGRAPHY

4
 INTRODUCTION

This report contains a comprehensive record of our work performed on the research
project. It includes detail of all the tasks that we performed in the course of this
project. These tasks are presented in this report in a sequence to make it easy for
the reader to understand and comprehend the results.

Problem Statement:
“What are the perceptions of people about Islamic Banking?”

Research Objectives:
Our research aims to fulfill many purposes. They are listed below:

1. To explore the perception of people regarding Islamic Banking.

2. To find out which Islamic Banks do people know of.
3. To see how many people use Islamic Banking and why.
4. To whether Islamic Banks are working strictly in accordance with Shariah
compliances.

Hypothesis:
H1: Islamic Banks are working strictly according to the Shariah
Compliances.

H2: Islamic banking is banking without Riba only.

H3: Islamic banking is conventional banking with a different name only.

H4: People are aware of the basic concepts of Islamic Banking

The above stated hypotheses were developed in order to be tested by survey.

5
Background:
Although, Islamic Banking at very small scale was present in Pakistan at the time of
her inception in 1947, but due to having a very small volume of capital, limited
areas of operations these banks were vanished from the page of history. According
to Wilson RJ, the first attempt to establish an Islamic financial institution was took
place in Pakistan in late 1950s with the establishment of a local Islamic bank in rural
area. This banking organization was known as “Rural Cooperative West Pakistan”.
Some pious landlords who deposited their extra money (funds) at no interest, and
then loaned to small landowners for agricultural advanced, but a small charge was
levied to cover the bank’s operational costs. The charge was far lower than the rate
of interest. Although the experience was encouraging, two main factors were
responsible for its failure. First, the limited funds available to loan could not cover
the gap between deposits and credit. Secondly, the bank staff did not have
complete autonomy over its operation. The serious steps towards Islamization of the
principles and constitution were took place in 1962 when the Council of Islamic
Ideology (CII) was established. The third constitution of Pakistan was passed in
1973, which allowed comprehensive legislation on Islamic Principles and
establishment of Federal Shariah Court (FSC).

In 1980, the Council of Islamic Ideology (CII) presented its report on the elimination
of interest, genuinely considered to be the first major work in the world undertaken
towards the establishment of Islamic Banking and Finance. In 1985, all commercial
banks were bound by legislation to write-off all interest bearing transactions and
transform their nomenclature stating all Rupee saving accounts as interest-free
within next five years. However, foreign currency deposits in Pakistan and lending
of foreign loans continued as those were done before.

In 1991, the Federal Shariat Court declared procedures adopted by the commercial
banks non-Islamic. The government made appeals to the Shariat Appellate Bench of
the Supreme Court of the Pakistan against the FSC’s declaration. Until today, the
dispute between government and FSC is still in progress, and details of the news in
print and other media revealed that government aimed to sabotage the historic
decision of FSC.

The Islamization process of all state owned banks in Pakistan seems to take very
long time, because of very complex network of branches, misconduct of authorities,
absence of firm determination from government. Perhaps, the root-cause of this
failure was that the government and all the institutions having jurisdiction, not only
did not felt their own responsibility on this important issue, but also with ample
dexterity tossed the responsibility of Islamization process to the Federal Shariat
Court to review its earlier decision that declared all interest bearing transaction

6
non-Islamic. So, it is the duty of government to devise policies, acquire proper
resources and take necessary steps to solve the challenges and problems
confronting the country on this dilemma. Similarly it is the primary task of
government to combat with the riba dilemma and establish a full-fledged Islamic
banking system in state owned banks.

Developing a successful, practicable and complete model of lslamic banking was a

complex and difficult task for government and it should be not wise to
underestimate this task, especially in a developing country. Therefore, it was
decided to promote lslamic banking on parallel basis with conventional banking
system. State Bank of Pakistan issued the criteria for establishment of lslamic banks
in private sector and subsidiaries branches by existing conventional banks to
conduct Islamic banking in the country. It was private sector that took the initial and
pioneering step to establish a full-fledged Islamic Bank in Pakistan. In 2002 with the
name of Meezan Islamic Bank the Islamic Banking in its real form started in
Pakistan. At present there are four full-fledged Islamic commercial banks and many
Islamic banking windows or branches are offering Islamic banking services by
conventional banks.

7
 METHODOLOGY

Sampling Design:
We chose to survey 120 people based on our budget and time availability. The
criteria that was set for the people to be surveyed was that they should be 18 and
above who use and understand the services of banks and who may be mature
enough to think critically about Islamic Banking and its principles.

However, the sampling technique that we used in this survey was non-probability
sampling, to be more specific convenience sampling due to limited budget and ease
of use.

We surveyed the working class on I. I. Chundrigar road for the majority of the
sample and remaining sample consisted of university students. The questionnaire
can be reviewed in the appendix A of this report.

Research Design:
To further comprehend the research study, we conducted some exploratory
research before going on to the final conclusive study. The findings from the
exploratory research are presented below:

Exploratory Research:
For exploratory research we searched online and came across several articles
regarding Islamic banking which is included in this section of report.

Secondary Data
We analyzed the following articles as a part of our secondary research.

• Islamic economies in the world

• Interest free commercial banking by A.L.M Abdul Gafoor

• Islamic finance by Mark Andrews

• Perceptions about Islamic Banking by Institute of Islamic Banking and Insurance

• Building an alternative financial system

• A comparative analysis of perceptions about Islamic Banking

The main points discussed in these articles were:

8
 • In the last decade Islamic banking has attracted great attention
• In most countries the establishments of interest-free banking had been by
private initiative and were confined to that bank. In Iran and Pakistan,
however, it was by government initiative and covered all the banks.
• The positive trends in Islamic banking are much stronger than the problems
• Banking and Islam cannot go hand in hand
• May be it is not completely in accordance with the teachings of Islam but
Islamic Banking is a very good alternative for conventional banking
• The employees in Islamic Banks who basically deal in Islamic products and
services, are not completely aware of the Islamic rules and regulations

Conclusive Research:
After the exploratory research, we conducted the conclusive study using the sample
previously chosen.

Data Collection Method:

For our conclusive research, the data collection method used was survey research.
The survey was conducted by method of communication using self-administered
questionnaires.

Data Analysis:
For analyzing the data collected, we used software called Statistical Package for
Social Sciences (SPSS).

Limitations:
Besides the significance of this kind of study, there were several limitations of the
application of the study which are as follows:

• Limited period of time and small sample size. Results may not be indicative for
the target respondents at large.

• Some respondents, who have limited knowledge about the principles of Islamic
banking, also answered the questions; hence the replies of some questions may
be based on their own imagination or thoughts.
9
10
 FINDING
Question No 1

for what purpose do you use bank

others

investmen/saving

borrow ings

For what purpose do you use bank.

Frequency Percent Valid Cumulative

Percent Percent

Valid Investment/savi 45 37.5 37.5 37.5

ng

Borrowings 17 14.2 14.2 51.7

Others 58 48.3 48.3 100.0

Total 120 100.0 100.0

Rationale:

The very first objective of our report was to find why people use banks. We
provided our sample all the possible options that a bank gives to it consumers.

Outcome:

11
 According to our results, 37.5 % use the bank for investment and
saving purposes. 14.2 % use it for borrowing purposes while 48.3% uses for
consumer purposes like consumer financing which is pretty obvious like car and
house financing.

12
Question No 2

what type of account do you have

current/saving

current account
others

fixed deposit accoun

savings account

What type of account do you have

Frequency Percent Valid Cumulative Percent

Percent

Valid Current Account 49 40.8 40.8 40.8

Savings Account 24 20.0 20.0 60.8

Fixed deposit 16 13.3 13.3 74.2

Account

Others 9 7.5 7.5 81.7

Current/Saving 22 18.3 18.3 100.0

Total 120 100.0 100.0

Rationale:

The second thing which is line with this question is, what kind of accounts do
the samples have in the banks.

Outcome: According to the results, 40.8 % have current account because of

business transactions. 20 % have saving accounts. 13 % have fixed deposit
accounts while 18.3 % of our sample size has current and saving account both. 7.5
% had other accounts.
13
Question No 3

which bank you use

islamic banking

conventinal banking

Which bank you use

Frequency Percent Valid Cumulativ

Percent e Percent

Valid Conventional 74 61.7 61.7 61.7

Banking

Islamic Banking 46 38.3 38.3 100.0

Total 120 100.0 100.0

Rationale:

This question highlighted the main objective of our research. It clearly gave
us the picture of the user of Conventional and Islamic banks.

Outcome:

The results were not surprising for us. 61.7 % of the people use Conventional
banking system while 38.3 % use Islamic banking system. We only have 5 Islamic

14
banks while approximately 26 Conventional banks are being operated in Pakistan.
Further analysis will be discussed later in the report

15
Question No 4

what are the reasons of conventional bank

s ervice/products /oth

s ervice/products

s ervice/other

s ervice

products

interest/serv ice/oth

interest/serv ice

interest

What are the reasons of conventional bank

Frequency Percent Valid Percent Cumulative

Percent

Valid 46 38.3 38.3 38.3

interest 23 19.2 19.2 57.5

interest/servic 7 5.8 5.8 63.3

e

interest/servic 6 5.0 5.0 68.3

e/other

products 14 11.7 11.7 80.0

service 9 7.5 7.5 87.5

service/other 3 2.5 2.5 90.0

service/produ 5 4.2 4.2 94.2

cts

16
 service/produ 7 5.8 5.8 100.0
cts/others

Total 120 100.0 100.0

Rationale:

We were accepting a large number of consumers of Conventional Banks.

Therefore we phrased this question.

Outcome:

19.2 % of our sample size uses it to earn interest .5.8 % use it for interest
and the service provided. 5 % had other options as well to it. 11.7 % are satisfied
with the products, 7.5 % are with service and 2.5 % had other options as well. 4.2 %
use it for service and product purpose while 5.8 % use it for service product and
other purpose.

17
18
Question No 5

partially satisfied

no

satisfied

strongly satisfied

How satisfied are you with your bank

Frequency Percent Valid Cumulativ

Percent e Percent

Valid strongly 5 4.2 7.4 7.4

satisfied

satisfied 29 24.2 42.6 50.0

partially 34 28.3 50.0 100.0

satisfied

Total 68 56.7 100.0

no 52 43.3

Total 120 100.0

Rationale:

Now answer of this question was very surprising for us. The user of
Conventional banking is actually satisfied with the service and the result we got is
as follows.

19
Outcome:

4.2% are strongly satisfied. 24.2 % are just satisfied. 28.3 % are partially
satisfied while 43.3 are not satisfied.

20
 Question No 6

at later date would you be willing to open an account with an islamic ba

yes
didnt answ er

religous and ease of

religious ease of location

no

At later date would you be willing to open an account with an Islamic bank

Frequenc Percent Valid Cumulati

y Percent ve
Percent

Didn’t 46 38.3 38.3 38.3

answer

ease of 1 .8 .8 39.2
location

no 27 22.5 22.5 61.7

religious 3 2.5 2.5 64.2

religious 2 1.7 1.7 65.8

and ease
of
location

yes 41 34.2 34.2 100.0

21
Total 120 100.0 100.0

22
Rationale:

Though we had a large number of consumers who were not satisfied with the
service of Conventional banks, but still 38.3 % people didn’t answer. The other
result is as follows.

Outcome:

22.5 % said no. 2.5 % said that they will open it for religious purpose while
1.7 % said that religious purpose and ease of location can be a reason. While other
34.2 % did agree but didn’t give us reasons

23
Question No 7

what are the reasons of using islamic banking

interest free bankin

Missing

islamic consumer fin

interest/service/bra

interest free/high r
interest/branch

What are the reasons of using Islamic Banking?

Frequenc Percent Valid Cumulative

y Percent Percent

Valid interest free 40 33.3 71.4 71.4

banking

Islamic consumer 1 .8 1.8 73.2

financing

interest/service/br 6 5.0 10.7 83.9

anch

interest free/high 4 3.3 7.1 91.1

return/service/bran
ch

interest/branch 5 4.2 8.9 100.0

Total 56 46.7 100.0

Missing System 64 53.3

24
 Total 120 100.0

Rationale:

Since this question was only for people who are using Islamic banking
therefore we half of the people didn’t replied to us. The other results are as follow

Outcome:

33.3 % use it because it’s a interest free banking. 1 person of our sample
even use it because of Islamic consumer financing. 5 % use it because of interest
free, service and branch network. 3.3 % had all the reasons i.e. service, interest free
and branch network while 4.2 % use if for interest and branch.

25
Question No 8

do you understand the key concept of islamic banking

yes

no

Do you understand the key concept of Islamic banking

Frequenc Percent Valid Cumulati

y Percent ve
Percent

Valid yes 47 39.2 39.2 39.2

no 73 60.8 60.8 100.0

Total 120 100.0 100.0

Rationale:

This question was phrased to know how much people are aware of key
concepts of Islamic banking.

26
Outcome:

39.2 % are aware of it while 60.8 % are not aware of it.

27
 Question No 9

howfar doyouunderstandthetermribaas far asislamicbankingoperat

fullyunderstand
Missing

understand

littleunderstand

donot understand littleconfuse

partial confuse

confuse
perplex

How far do you understand the term Riba as far as Islamic banking operations are
concerned

Frequency Percent Valid Cumulative

Percent Percent

Valid fully 10 8.3 10.3 10.3

understand

understand 16 13.3 16.5 26.8

little 7 5.8 7.2 34.0

understand

little 8 6.7 8.2 42.3

confuse

partial 8 6.7 8.2 50.5

confuse

confuse 2 1.7 2.1 52.6

perplex 18 15.0 18.6 71.1

do not 28 23.3 28.9 100.0

understand

Total 97 80.8 100.0

Missing partial 16 13.3

understand

28
 System 7 5.8

Total 23 19.2

Total 120 100.0

Rationale:

Riba is the key term of Islamic banking. The question was phrased to find out
are people actually aware of this term?

Outcome:

8.3 % fully understand the term riba.13.3 % understand means they are still
not slightly clear. 5.8 % do not understand much. 6.7 % are partially confused while
2.7 % are confused. 15 % still faces this ambiguity situation while 23.3 % do not
understand at all. 16 people didn’t reply.

29
 Question No 10

what doyouunderstandthepayment thebankispayingyouonyour longt

profit oninvestment

interest onsaving

What do you understand the payment the bank is paying you on your long term
investments/fixed term deposits

Frequency Percent Valid Cumulative

Percent Percent

Valid profit on 51 42.5 100.0 100.0

investment

interest on 67 55.8
savings

System 2 1.7

Total 69 57.5

Total 120 100.0

30
Rationale:

The answer to this question will help us in analyzing what people perceive
bank is actually paying them

Outcome:

55.8 % of people know that they are earning interest though it’s not allowed
in Islam. While 42.5 % thinks that they are earning profit.

31
Question No 11

islamic banking is a socially acceptable and fair banking system

tendtodissagree

strongly agree

hardtodecide

tendtoagree

Islamic banking is a socially acceptable and fair banking system

Frequenc Percent Valid Cumulati

y Percent ve
Percent

Valid strongly 39 32.5 32.5 32.5

agree

tend to 27 22.5 22.5 55.0

agree

hard to 33 27.5 27.5 82.5

decide

tend to 21 17.5 17.5 100.0

disagree

Total 120 100.0 100.0

Rationale:

This question helped us in analyzing the perception of Islamic Banking

system towards people.

Outcome:

32
 32.5 % people strongly agree that it is a fair and socially banking system.
22.5 % tend to agree. For 27.5 % people, it’s hard to decide. 17.5 % tend disagree.

33
Question No 12

islamic banking can contribute to societal balance, human prosperity and

strongly dissagre

strongly agree

tend to dissagree

tend to agree

hard to decide

Islamic banking can contribute to societal balance, human prosperity and welfare

Frequency Percent Valid Cumulative

Percent Percent

Valid strongly 28 23.3 23.3 23.3

agree

tend to 28 23.3 23.3 46.7

agree

hard to 32 26.7 26.7 73.3

decide

tend to 25 20.8 20.8 94.2

disagree

strongly 7 5.8 5.8 100.0

disagree

Total 120 100.0 100.0

Rationale:

This question was phrase to know whether Islamic banking can contribute to
societal balance, human prosperity and welfare.

Outcome:

34
 23.3 % strongly agree. Other 23.3 % tend to agree. For 26.7 % people it’s
hard to decide.20.8 % tend to disagree. While 5.8 % strongly disagree

35
 Question No 13

islamic banks distribute higher returns on investment as compared to con

Missing strongly agree

tend to agree

strongly dissagree

hard to decide

tend to dissagree

Islamic banks distribute higher returns on investment as compared to conventional

banks

Frequency Percent Valid Cumulativ

Percent e Percent

Valid strongly 6 5.0 5.1 5.1

agree

tend to 13 10.8 11.1 16.2

agree

hard to 32 26.7 27.4 43.6

decide

tend to 30 25.0 25.6 69.2

disagree

strongly 36 30.0 30.8 100.0

disagree

Total 117 97.5 100.0

Missing System 3 2.5

36
 Total 120 100.0

Rationale:

This question was phrased to find out whether Islamic banks distribute higher
returns on investment as compared to conventional banks?

Outcome:

5 % strongly agree. 10.8 % tend to disagree. For 26.7 % people it’s hard to
decide. 25 % people tend to disagree. While 30 % people strongly disagree.3 people
didn’t answer this question.

37
Question No 14

whichislamicbanksdoyouknow

m
eezan_islam
i
m
eezan_em
irates
all
m
eezan_dubai

dawood
m
eezan
dawood/m
eezan/islam
i
dawood_dubai_islam
i
dubai_m
eezan_islam
i_
dawood_dubai_meezan
dubai_m
eezan_islam
i
dawood_dubai_m
eezan_
dubai_m
eezan_em
irate
dawood_m
eezan
dubai_m
eezan
dawood_m
eezan_em
irat
dawood_m
eezan_islam
i

dubai_dawood_islam
i

Which Islamic banks do you know

38
 Frequency Percent Valid Cumulativ
Percent e Percent

Valid all 24 20.0 20.0 20.0

Dawood 3 2.5 2.5 22.5

Dawood/Meezan/Islami 5 4.2 4.2 26.7

Dawood_Dubai_Islami 2 1.7 1.7 28.3

Dawood_Dubai_Meezan 8 6.7 6.7 35.0

Dawood_Dubai_Meezan_Emira 9 7.5 7.5 42.5

tes

Dawood_Meezan 6 5.0 5.0 47.5

Dawood_Meezan_Emirates 1 .8 .8 48.3

Dawood_Meezan_Islami 1 .8 .8 49.2

Dubai_Dawood_Islami 1 .8 .8 50.0

Dubai_Meezan 12 10.0 10.0 60.0

Dubai_Meezan_Emirates 1 .8 .8 60.8

Dubai_Meezan_Islami 8 6.7 6.7 67.5

Dubai_Meezan_Islami_Emirate 2 1.7 1.7 69.2

s

Meezan 18 15.0 15.0 84.2

Meezan_Dubai 7 5.8 5.8 90.0

Meezan_Emirates 1 .8 .8 90.8

Meezan_Islami 11 9.2 9.2 100.0

Total 120 100.0 100.0

Rationale:

This question was to find out how many people are aware of the Islamic
Banks Operational in Pakistan

Outcome:

It can be seen only 20% of the respondents were aware of all the banks
working in Pakistan. 15% were only aware of Meezan bank, 2.5% were aware of
Dawood.
39
Question No 15

is islamic banking, banking without riba

no

yes

Is Islamic banking, banking without Riba

40
 Frequency Percent Valid Cumulativ
Percent e Percent

Valid yes 63 52.5 100.0 100.0

no 46 38.3

System 11 9.2

Total 57 47.5

Total 120 100.0

Rationale:

Previously we have asked whether people are aware of Riba. Now this
question was for those who were aware of the term

Outcome:

52.5 % agree that its without Riba. While 38.3 % disagree to it.

41
Question No 16

islamic banking is conventional banking with a diffrent name only

agree

dissagree

Islamic banking is conventional banking with a different name only

Frequency Percent ValidCumulative

Percent Percent

Valid agree 46 38.3 38.3 38.3

disagree 74 61.7 61.7 100.0

Total 120 100.0 100.0

Rationale:

Islamic banking is even a part of Commercial banking system. So to inquire

whether people think that it’s just the same as Conventional banking system we
phrased the question.

Outcome:

38.3 % people agree to this while 61.7 % disagree to the fact.

42
Question No 17

islamic bank operates under strick shariah law

disagree

agree

Islamic bank operates under strict shariah law

Frequency Percent Valid Cumulativ

Percent e Percent

Valid agree 67 55.8 55.8 55.8

disagree 53 44.2 44.2 100.0

Total 120 100.0 100.0

Rationale:

To further know about people’s Islamic banking knowledge, we phrased this

question

Outcome:

The result tells us that 55.8 % people agree to the fact that Islamic banks
operate under strict shariah laws while 44.2 % people disagree.

43
 Question No 18

to what extent are you aware how your investment is being utilized by th

greatly aware

partial aware
aware
little aware

hard to say

not aware perplex

To what extent are you aware how your investment is being utilized by the bank

Frequency Percent Valid Cumulativ

Percent e Percent

Valid greatly 3 2.5 3.2 3.2

aware

partial 14 11.7 14.9 18.1

aware

little 3 2.5 3.2 21.3

aware

hard to 2 1.7 2.1 23.4

say

perplex 40 33.3 42.6 66.0

not aware 32 26.7 34.0 100.0

Total 94 78.3 100.0

44
 aware 20 16.7

System 6 5.0

Total 26 21.7

Total 120 100.0

Rationale:

The question was phrase to inquire whether people actually know how their
investment is being utilized.

Outcome:

2.5 % of our sample are greatly aware.11.7 % are partially aware.2.5 % are
little aware. For 1.7 % people, it was hard to say. 33.3 % are perplexed while 26.7 %
are not aware.16.7 are in the middle situation as in they are only aware.

45
 Question No 19

howwould yourate your level of satisfactionwithyour bank during tran

exceptionally low

low

medium

exceptionally high

high

How would you rate your level of satisfaction with your bank during transactions

Frequency Percent Valid Cumulativ

Percent e Percent

Valid exceptional 23 19.2 19.2 19.2

ly high

high 60 50.0 50.0 69.2

medium 29 24.2 24.2 93.3

low 7 5.8 5.8 99.2

exceptional 1 .8 .8 100.0
ly low

Total 120 100.0 100.0

Rationale:

This question depends on the service the bank is providing them. What we
concluded is as follows

Outcome:

46
 For 19.2 % people satisfaction level is exceptionally high. For 50 % it’s high.
For 24.2 % its medium. For 5.8 % its low, while for one person it was exceptionally
low probably he must had some personally grudges.

47
Question No 20

which age group do you belong

18-30
51-60

31-40
41-50

Which age group do you belong

Frequency Percent Valid Cumulativ

Percent e Percent

Valid 18-30 13 10.8 10.8 10.8

31-40 48 40.0 40.0 50.8

41-50 40 33.3 33.3 84.2

51-60 19 15.8 15.8 100.0

Total 120 100.0 100.0

Rational

Now the further questions analyze our target group. We have chosen a sample of
120 people. The profile of this sample is as follow

Outcome:

13 people out of our sample size belong to age group 18-30. 48 people
belong to age group 31-40. 40 belong to age group 41-50, while 19 belong to age
group 51-60

8 people were just Matric qualified.33 were inter/a-levels. 74 were graduates since
we were targeting more of service people while 5 were PhD. 96 were males while 24
were females
48
Question No 21

educational qualifications

ph.d matric/o level

inter/a-level

graduate

Educational qualifications

Frequency Percent Valid Cumulative

Percent Percent

Valid Matric/O 8 6.7 6.7 6.7

level

Inter/A-level 33 27.5 27.5 34.2

Graduate 74 61.7 61.7 95.8

PhD 5 4.2 4.2 100.0

Total 120 100.0 100.0

49
Question No 22

proffession
self employed

student

goverment employee

private employee

Profession

Frequency Percent Valid Cumulativ

Percent e Percent

Valid student 9 7.5 7.5 7.5

governme 12 10.0 10.0 17.5

nt
employee

private 60 50.0 50.0 67.5

employee

self 39 32.5 32.5 100.0

employed

Total 120 100.0 100.0

50
Question No 23

monthly income

5000-15000
Missing
15001-25000

more than 60000

25001-40000

40001-60000

Monthly income

Frequency Percent Valid Cumulative

Percent Percent

Valid 5000- 6 5.0 5.0 5.0

15000

15001- 5 4.2 4.2 9.2

25000

25001- 45 37.5 37.8 47.1

40000

40001- 30 25.0 25.2 72.3

60000

more than 33 27.5 27.7 100.0

60000

Total 119 99.2 100.0

51
Missing System 1 .8

Total 120 100.0

52
Question No 24

gender
female

male

Gender

Frequency Percent Valid Cumulative

Percent Percent

Valid male 96 80.0 80.0 80.0

female 24 20.0 20.0 100.0

Total 120 100.0 100.0

53
 CONCLUSION

We hereby conclude all our research and findings. It’s

been a long journey from analyzing theory to making up of
problem statement, from problem statement to generating
research purposes, from exploratory research to
questionnaires to hypotheses testing and finally analyzing
them all to have the following results:

• Majority of the people we surveyed did not completely

know about the basic principles of Islamic Banking.
• The results of our analysis show that the number of
people using Conventional Banks is far more than the
number of people using Islamic Banks. The reasons for
these variations are the lack of knowledge about Islamic
Banking principles and the high interest rates provided
by the Conventional Banks

54
55
 RECOMMENDATION

On the basis of our conclusions we recommend the following:

1. People are still perplexed about what Islamic Banking

actually is. There is a need to create more awareness
among the masses about its key concepts.
2. Even universities can play a role by offering a major in
Islamic banking.

56
 APPENDEX A
QUESTIONNAIRE

1. For what purposes do you use bank:

 Investment/Savings
 Borrowings
 Others

2. What type of account do you have?

 Current Account
 Savings account
 Fixed Deposit account
 Other

3. Which Bank you use?

A Conventional Bank

B Islamic Bank

If your answer is A then answer next question otherwise go to question 7.

4. What are the reasons of Conventional Bank?

 Interest
 Service
 Products
 Other

5. How satisfied are you with your Bank?

Strongly _____ _____ _____ _____ ______ ______ Strongly

Satisfied Dissatisfied

6. At a later date would you be wiling to open an account with an Islamic Bank?

 Yes
 No
57
 If yes, can you please specify your reasons:

________________________________________________________________

7. What are the reasons of using Islamic Banking

 Interest Free Banking

 Higher Returns
 Service Quality
 Branch Network
 Islamic Consumer Financing
 Other ______________

8. Do you understand the key concepts of Islamic Banking?

 Yes
 No

9. How far do you understand the term ‘Riba’ as far as Islamic Banking
operations are concerned ?

Fully Do not
understan understan
d d
----- ----- ----- ----- ----- ----- -----

10.What do you consider the payment the bank is paying you on your long term
investments/Fixed Term Deposits?

 Interest on Savings
 Profit on Investments

11.How strongly do you agree or disagree with the following statements:

Hard Tend Strong

Strong Tend to to ly
ly to Decid Disagr Disagr
Agree Agree e ee ee

58
Islamic Banking is a socially acceptable
and fair banking system

Islamic Banking can contribute to

societal balance, human prosperity and
welfare

Islamic banks distribute higher returns

on investment as compared to
conventional banks

12.Which Islamic Bank do you know of? (Check all you know of)

 Dawood Islamic Bank

 Dubai Islamic Bank
 Meezan Bank
 Albaraka Islamic Bank
 Bank Islami Pakistan
 Emirates Global Islamic Bank

13. Is Islamic Banking, Banking without RIBA?

 Yes
 No

14.Islamic Banking is conventional banking with a different name only.

 Agree
 Disagree
15.Islamic bank operates under strict shariah laws

 Agree
 Disagree

16.To what extent are you aware how your investment is being utilized by this
bank?

Greatly Not

Aware Aware
--1-- --2-- --3-- --4-- --5--

59
17. How would you rate your level of satisfaction with your bank during your
transactions?

 Exceptionally High
 High
 Medium
 Low
 Exceptionally Low

18. Which age group do you belong to?

 18-30 years
 31-40 years
 41-50 years
 51-60 years
 61 and above

19. Educational Qualification:

 Middle School
 Matric/ O Levels
 Intermediate / A-levels
 Graduate
 Ph.D

20.Profession:
a. Student
b. Government Employee
c. Private Employee
d. Self Employed
21.Monthly Income:

a. Rs.5,000-15,000
b. Rs. 15,001-25,000
c. Rs. 25,001-40000
d. Rs. 40,001-60,000
e. More than 60,000
60
22.Gender:
a. Male
b. Female

61
 BIBLIOGRAPHY

1) Wikipedia.com

2) Google.com

3) Pakistaneconomist.com

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