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

6575 Words Oct 23rd, 2012 27 Pages
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
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Syariah prohibits the fixed or floating payment or acceptance of specific interest or fees (known as Riba or usury) for loans of money. The word "Riba" means excess, increase or addition, which according to Syariah terminology, implies any excess compensation without due consideration (consideration does not include time value of money). However, these principles may have been applied to historical Islamic economies and in the late 20th century that a number of Islamic banks were formed to apply these principles to private or semi-private commercial institutions within the Muslim community.
In early Islamic banking, a number of economic concepts and techniques were applied, including bills of exchange, partnership (mufawada) such as limited partnerships (mudaraba), and forms of capital (al-mal), capital accumulation (nama al-mal), cheques, promissory notes, trusts, transactional accounts, loaning, ledgers and assignments. Organizational enterprises independent from the state also existed in the medieval Islamic world, while the agency institution was also introduced during that time. Many of these early capitalist concepts were adopted and further advanced in medieval Europe from the 13th century onwards.
Besides that, Islamic Banking is growing at a rate of 10-15% per year in this modern era with the signs of consistent future growth. Islamic banks have more than 300 institutions spread over 51 countries, including the United States