Do bank customers prefer profit sharing investment accounts? a proposed conceptual framework

The concept of sharing profit earned by Islamic banks with their investors is one of the distinguishing features that set Islamic banks apart from their conventional counterparts. The contract of mudarabah is used by Islamic banks to mobilise funds with the objective to share profit with the investo...

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Main Authors:	Rosman, Romzie, Ya’u, Isah, Othman, Anwar Hasan Abdullah
Format:	Conference or Workshop Item
Language:	English
Published:	2019
Subjects:	HG1501 Banking
Online Access:	http://irep.iium.edu.my/77118/ http://irep.iium.edu.my/77118/ http://irep.iium.edu.my/77118/1/77118%20-%20Do%20bank%20customers%20prefer%20profit%20sharing%20investment%20accounts%20a%20proposed%20conceptual%20framework-%20with%20evidence.pdf

id	iium-77118
recordtype	eprints
spelling	iium-771182019-12-17T05:19:03Z http://irep.iium.edu.my/77118/ Do bank customers prefer profit sharing investment accounts? a proposed conceptual framework Rosman, Romzie Ya’u, Isah Othman, Anwar Hasan Abdullah HG1501 Banking The concept of sharing profit earned by Islamic banks with their investors is one of the distinguishing features that set Islamic banks apart from their conventional counterparts. The contract of mudarabah is used by Islamic banks to mobilise funds with the objective to share profit with the investors. Any financial losses incurred by the banks in the course of their financing or investment is to be borne entirely by the depositors, except in cases of negligence and breach of contract. Based on literature that investigated the factors effecting the adoption of Islamic banking and finance products, the factors differ based on countries. It is found that GCC countries showed that religious factor in terms of compliance with the provisions of Shariah by the Islamic banks is the most important factor that influences the selection of Islamic banking products in the GCC countries. However, in the MENA region, it could be observed that religious belief and compliance with Shariah by Islamic banks were not the major factors that influence customer’s choice of Islamic banks unlike in the GCC countries. Not only that, it is also found that the factors that influence the choice of Islamic banks amongst customers in Asia were not consistent. Whereas some studies show religious inclination as the most important factor in choosing Islamic banks by customers especially in some studies in Malaysia, other studies show that high profit and low-cost service as the most important selection criteria. Hence, the proposed conceptual framework that integrated both the Theory of Reasoned Action (TRA) and Theory of Planned Behaviour (TPB) together with the unique elements of religiosity and risk tolerance are expected to predict the behaviour of profit sharing investment account holders. By understanding the behaviour of investors in choosing profit sharing investment account, this study can assist the management of the Islamic banks to develop strategies to attract and retain the investments. Moreover, this study can assist regulators to ensure that the rights of this class of investors is protected by the Islamic banks. 2019-12-03 Conference or Workshop Item PeerReviewed application/pdf en http://irep.iium.edu.my/77118/1/77118%20-%20Do%20bank%20customers%20prefer%20profit%20sharing%20investment%20accounts%20a%20proposed%20conceptual%20framework-%20with%20evidence.pdf Rosman, Romzie and Ya’u, Isah and Othman, Anwar Hasan Abdullah (2019) Do bank customers prefer profit sharing investment accounts? a proposed conceptual framework. In: The 7th ASEAN Universities International Conference on Islamic Finance (AICIF 2019), Gontor, Indonesia. (Unpublished) http://ei.unida.gontor.ac.id/aicif-2019/
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HG1501 Banking
spellingShingle	HG1501 Banking Rosman, Romzie Ya’u, Isah Othman, Anwar Hasan Abdullah Do bank customers prefer profit sharing investment accounts? a proposed conceptual framework
description	The concept of sharing profit earned by Islamic banks with their investors is one of the distinguishing features that set Islamic banks apart from their conventional counterparts. The contract of mudarabah is used by Islamic banks to mobilise funds with the objective to share profit with the investors. Any financial losses incurred by the banks in the course of their financing or investment is to be borne entirely by the depositors, except in cases of negligence and breach of contract. Based on literature that investigated the factors effecting the adoption of Islamic banking and finance products, the factors differ based on countries. It is found that GCC countries showed that religious factor in terms of compliance with the provisions of Shariah by the Islamic banks is the most important factor that influences the selection of Islamic banking products in the GCC countries. However, in the MENA region, it could be observed that religious belief and compliance with Shariah by Islamic banks were not the major factors that influence customer’s choice of Islamic banks unlike in the GCC countries. Not only that, it is also found that the factors that influence the choice of Islamic banks amongst customers in Asia were not consistent. Whereas some studies show religious inclination as the most important factor in choosing Islamic banks by customers especially in some studies in Malaysia, other studies show that high profit and low-cost service as the most important selection criteria. Hence, the proposed conceptual framework that integrated both the Theory of Reasoned Action (TRA) and Theory of Planned Behaviour (TPB) together with the unique elements of religiosity and risk tolerance are expected to predict the behaviour of profit sharing investment account holders. By understanding the behaviour of investors in choosing profit sharing investment account, this study can assist the management of the Islamic banks to develop strategies to attract and retain the investments. Moreover, this study can assist regulators to ensure that the rights of this class of investors is protected by the Islamic banks.
format	Conference or Workshop Item
author	Rosman, Romzie Ya’u, Isah Othman, Anwar Hasan Abdullah
author_facet	Rosman, Romzie Ya’u, Isah Othman, Anwar Hasan Abdullah
author_sort	Rosman, Romzie
title	Do bank customers prefer profit sharing investment accounts? a proposed conceptual framework
title_short	Do bank customers prefer profit sharing investment accounts? a proposed conceptual framework
title_full	Do bank customers prefer profit sharing investment accounts? a proposed conceptual framework
title_fullStr	Do bank customers prefer profit sharing investment accounts? a proposed conceptual framework
title_full_unstemmed	Do bank customers prefer profit sharing investment accounts? a proposed conceptual framework
title_sort	do bank customers prefer profit sharing investment accounts? a proposed conceptual framework
publishDate	2019
url	http://irep.iium.edu.my/77118/ http://irep.iium.edu.my/77118/ http://irep.iium.edu.my/77118/1/77118%20-%20Do%20bank%20customers%20prefer%20profit%20sharing%20investment%20accounts%20a%20proposed%20conceptual%20framework-%20with%20evidence.pdf
first_indexed	2023-09-18T21:48:50Z
last_indexed	2023-09-18T21:48:50Z
_version_	1777413631719243776

Do bank customers prefer profit sharing investment accounts? a proposed conceptual framework

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