Barriers to Successful Implementation of Islamic Banking System in Pakistan

Abstract

Banking industry has become everyone’s need in today’s world and this industry is establishing itself to entertain as many people as they can no matter they are kids, youth, or old, this industry is trying to get as much of the market as they can and, is introducing new concepts and products. Islamic Banking is a whole new concept of banking with the ideology of Islamic background and targets the followers of Islam; it is expending day by day however still lack in areas which are becoming barriers to successfully implementation of Islamic Banking system. This study will look after those areas where the Islamic banks lack and are unable to compete with conventional banks. In order to work, questionnaire were circulated for collection of data, sample size of the data was 204 and Likert scale was used for the formulation of questionnaire, Simple random sample technique, was used while collection of data was done. One sample T-test is applied to find the appropriate and accurate results. It is found that all three variables 1. Awareness of Islamic Banking 2. Service Quality 3. Narrow Branch Network, have a significant results, which means all these are the area where Islamic banking system lacks. This research is conducted to bring out the clear picture of the reasons why Islamic banks are not as efficient as conventional, so that Islamic banks can work over it in order to sustain in the Banking Industry.