Awarness Of Islamic Banking Culture In Pakistan

3606 words - 14 pages

Published information about principles of Islamic banking and finance and their applications is growing day by day. Pakistan is one of the 57 Islamic countries having a total population of over 170 million where majority of population practice Islam. Steps for Islamization of banking in Pakistan were initialized during 1977-78. Elimination of interest from the operations of specialized financial institutions took place in 1979 and from commercial banks during 1981-85. Commercial banks in Pakistan were cased to accept any interest baring deposits and all deposits were treated on the basis of profit and loss sharing since 1985. Islamic banking is defined as a banking system in consonance with the ethics and value system of Islam and is governed by the rules and regulations led by the Sharia’h. Main sources of sharia’h are Quran, Hadith, Sunnah, Ijmah, Qiyas and Ijtehad. According to Islamic sharia’h interest (Riba) is prohibited i.e. institutions are not allowed to offer a fixed rate of return on deposits and nor are they allowed to charge interest on loans , income from and investment in all un-ethical economic activities like investment in gambling, pork, alcohol etc are prohibited (Ayub, 2008). Financial activities in Islam are real asset backed with the ability to cause value addition. Most commonly used Islamic banking instruments in Pakistan are Mudaribah, Musharikah, Murabaha, Ijarah, Bai-Muajjal, and Bai-Salam. This study will help researcher cognize the awareness of Islamic banking culture as well as attitude toward Islamic banking in Pakistan.Background of the studyIslamic banking has been widely studies area since 1970s. Islamic banking was introduced to Pakistan in 1977-78. Interest elimination from the operations of specialized financial institutions took place in 1979 and from commercial banks during 1981-85. Commercial banks in Pakistan were cased to accept any interest baring deposits since 1985. Under mentioned study will plumb the awareness of Islamic banking culture in Pakistan as well as sketch the attitude of customers toward Islamic banking.Purpose of the StudyInitiatives for elimination of riba from banking sector of Pakistan has been taken in 1977-78, for more then 25 years Islamic banking has been practiced, the purpose of succeeding study is to cognize the awareness of Islamic banking culture in Pakistan as well as to explore the attitude toward Islamic bank either it is for religious reasons, economic reasons or any other reason. Significance of the StudyThis study will help managers to better understand the attitude banking customers in Pakistan. Studies will also be help for managers to know the currant level of Islamic banking culture awareness in Pakistan, which will help them in devising strategies to attract the customers toward Islamic banking and in return will benefit the Islamic banks to grow its share which is currently 12% of total assets of banking sector in Pakistan.DelimitationsUnderlying study will record...

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