Barriers to Islamic Banking Growth- Bank Employees’ Perspective from Pakistan
Abstract
The concept of Islamic banking (IB) in Pakistan traces its roots back to late 70s. Since its inception it has had its fair share of growth. The IB industry, despite its growth during the last few years, has not fully nurtured and its share in banking industry is moderate 6.4%. This study explores the view point of bank employees of Gujranwala Division Pakistan regarding this statistics. By using a sample of 126 respondents, comprising Islamic bank employees (IBE) and conventional bank employees (CBE) to investigate the factors responsible for low market share of Islamic banking in banking industry. Our findings indicate that according to over all sample small network of branches, inadequate info about Islamic banking services, ignorance to teachings of Islam, trust deficiency towards Interest free banking and location of banks as the main reason for mere rise of Islamic banking. The factors change if we divide our sample in subsamples of IBE and CBE. Although considerable work in this area has been done in world and Pakistan is no exception to this however, the focus of majority of research is on the customers view point. This paper explores the roots of modest share of IB from bank employees’ angle.
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