How challenges transform banking behavior of Islamic banks’ employees: A study in Pakistan

This study examines and helps to identify and recognize the challenges being faced by Islamic banks in Pakistan. In today’s global and borderless market, financial institutions are facing a severe competition for their survival. Currently, many objections are raised on Islamic banks as they have to face many challenges up front not only for competing all through but for their necessary survival too. The current world economic system is heavily dependent on interest based transactions due to which concentration of wealth is in the hands of selected few. It leads to a society with a wide gap between rich and poor. In contrast Islam encourages circulation of wealth, promotes sale and trade and discourages Interest (Riba). The objections raised on Islamic banks may include weak measures of service quality, improper institutional framework, lack of shariah supervisory role, knowledge gap and lack of understanding of shariah knowledge among customers and potential customers. It may further include improper training of staff and lack of resources. Hence, there are several objections raised by their competitors that Islamic banks have to face and to encounter them. To compete with this interest based system, Islam has the most modest, equitable and perfect solution (The Islamic Modes of Finance or Islamic Capitalism) having a long lasting impact if adopted not only by his followers but for non-believers too. The overall Islamic banking industry of Pakistan needs to meet all contemporary challenges in order to grow at more pace in comparison with conventional banks. To carry out a detailed research, both quantitative and qualitative measures will be used. It will enable us to have data in descriptive as well as in interviews format so that people can express more of their views regarding Islamic banking. This research will be helpful not only for the management personnel of Islamic banking industry at a wider level but for industry itself. In short this study can lead to Islamization of banking industry or at least to move one step further for the betterment of Islamic banking in Pakistan.