TO EXAMINE THOSE INFLUENCING FACTORS THAT SKEWED CORPORATE CUSTOMERS FROM CONVENTIONAL BANKING TOWARDS ISLAMIC BANKINGJAved

Abstract

This research study provides a clear picture that Religious, Economic and Socio Psychological are those influencing factors that Skewed corporate customers from conventional banking towards Islamic banking. The global platform for bankers, economists and investors is auditing and accounting for Islamic Financial Institutions (AAOIFI) is to promote the concept of Islamic banking that all modes of business dealings are based upon interest free. Pakistan is the second largest Islamic nation and 6th popular country in the world with over 180 million populations and the concept of Islamic banking is growing at 8% per annum. In our country Islam is the pre dominated religion the corporate client of Islamic banking is 20 million, 40 million people are conventional banking customers and rest of the people of Pakistan do not want to indulge with these financial institution. The trend of misconception about Islamic banking rises because of non-professional bankers was marketing the Islamic banking products in such a way they do the product marketing of conventional banking system. The Islamic banking is based upon asset backed financing while the conventional banking based upon money backed financing. SBP is the key motivator to adopt Islamic banking and the basic motivating factor to adopt the mechanism ofIslamic banking is the unique methodology of profit and loss sharing as per the regulation of Islamic sharia policy. Islamic banking has attracted numerous customers who were never engaged with banks, it will provide opportunity to the businessmen to expand their business operations through Riba free loans or interest free loans and it give the impetus to the business along with the more employment vacancy and increase in revenues. ' The operations of Islamic banking is totally different from conventional banking because in accordance with teaching of Islam the State Bank of Pakistan does Shariah audit of the banks' accounts and it is regulated by separate banks of SBP. Islamic bank does not engage in those business dealings whose nature of business is totally prohibit by the Islamic shariah, they do not indulge in those business transaction which are based upon interest; they do not invest in T-bills and PEBs. To conclude my research study it is clear that Islamic banking is 'HalaT and the attitude and behavior of corporate clients is shifted toward the provisions of financial products and services of Islamic banking while on the other hand conventional banking is 'Haram'.