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Understanding the objectives of Islamic banking: a survey of stakeholders' perspectives

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  • Asyraf Wajdi Dusuki

Abstract

Purpose - The purpose of this paper is to survey the viewpoints of various stakeholder groups on the philosophy and objectives of Islamic banking, particularly in a dual banking environment, as in the case of Malaysia. Design/methodology/approach - The paper presents primary data collected by self-administered and postal questionnaires involving a sample of 1,500 respondents representing seven stakeholder groups, namely customers, depositors, local communities, Islamic banking managers, employees, banking regulatory officers and Findings - This paper reveals that respondents regard Islamic banking as an institution that should uphold social objectives and promote Islamic values towards their staffs, clients and the general public. Other factors perceived to be important include contributing to the social welfare of the community, promoting sustainable development projects and alleviating poverty. Practical implications - The empirical evidence of this paper affects two aspects; first Islamic banks must not be solely profit-driven entities; rather they must aim at promoting Islamic norms and values to achieve the economic objectives as prescribed by Originality/value - The paper reports findings from the first nation-wide survey of diverse stakeholder groups in the area of Islamic banking and finance.

Suggested Citation

  • Asyraf Wajdi Dusuki, 2008. "Understanding the objectives of Islamic banking: a survey of stakeholders' perspectives," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing, vol. 1(2), pages 132-148, June.
  • Handle: RePEc:eme:imefpp:v:1:y:2008:i:2:p:132-148
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    Cited by:

    1. repec:ris:isecst:0163 is not listed on IDEAS
    2. Hanudin Amin & Mohamad Rizal Abdul Hamid & Suddin Lada & Ricardo Baba, 2009. "Cluster analysis for bank customers' selection of Islamic mortgages in Eastern Malaysia: An empirical investigation," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing, vol. 2(3), pages 213-234, August.
    3. Shaikh, Salman, 2013. "Economic Analysis of Islamic Banking in Pakistan," MPRA Paper 53797, University Library of Munich, Germany.
    4. Jill Johnes & Marwan Izzeldin & Vasileios Pappas, 2012. "A comparison of performance of Islamic and conventional banks 2004 to 2009," Working Papers 12893801, Lancaster University Management School, Economics Department.
    5. Shifa Mohd Nor & Ruzita Abdul Rahim & Zizah Che Senik, 2016. "The potentials of internalising social banking among the Malaysian Islamic banks," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, pages 347-372.
    6. repec:rss:jnljfe:v3i1p4 is not listed on IDEAS
    7. Sirajo Aliyu & Rosylin Mohd Yusof, 2016. "Profitability and Cost Efficiency of Islamic Banks: A Panel Analysis of Some Selected Countries," International Journal of Economics and Financial Issues, Econjournals, pages 1736-1743.

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    Keywords

    Islam; Banking; Stakeholder analysis; Surveys; Malaysia;

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