Research Article
BibTex RIS Cite

INTEREST- FREE BANKING: REASONS FOR CHOOSING ISLAMIC BANKING IN BINGOL CITY

Year 2017, , 257 - 268, 30.06.2017
https://doi.org/10.17261/Pressacademia.2017.411

Abstract

Participation banking (Interest Free Banking)/Islamic
Banking (IB) is a current topic in Turkey and in many Muslim countries. In
Hammurabi’s law  and Babil’s documents in
1955-1913  BC, interest and usury were
forbidden to protect the community. Participation banking is explained in this
study and compared with interest orienting conventional banking system.

 A questionnaire method was used as
a data collection tool in Bingöl city in East of Turkey in 2015. 500 customers
of Turkey Finance Bank in Bingöl were surveyed and obtained data was analyzed
through IBM SPSS 20 Software. Frequency-analysis method, descriptive statistics
and ANOVA methods were used to analyze collected data. According to these findings, it can be said that participating
banking is usually preferred among 20-40 age group. Also, it is stated that
participants use participating banking less than 6 years. The reason why they
select participation banking is as; close relationship with branch personnel,
leading religious sensibility, friendly and helpful personnel, image and
popularity of banking, Islamic Audit Commission of bank.

As the age of participants increase, they have more positive thoughts on
participation banking. Moreover, there is a high suspiciousness that IB is
applied as conventional banking, making it also Haram.  

References

  • Akerlof, G.A., (1970). The market for lemons: quality uncertainty and the market mechanism. Quarterly Journal of Economics, vol. 84, no. 3, p. 488-500.
  • Alessandri, T., Cerrato, D., Depperu, D. (2014). Organizational slack, experience and acquisition behavior across varying economic environments. Management Decision, vol. 56, no. 5, p. 967-982.
  • Abbas K.& Shirazi N.(2015) “The key players’ perception on the role of Islamic microfinance in poverty alleviation: The case of Pakistan”, Journal of Islamic Accounting and Business Research, Vol. 6 No. 2, pp. 244-267, DOI 10.1108/JIABR-06-2013-0017.
  • Abduh M. & Idrisov M.( 2014) “The Role of Awareness and Perceived Values upon the Acceptance of Islamic Banking and Finance in Dagestan”, Journal of Islamic Banking and Finance, July- Sept., pp.50-60.
  • Abedifara P., Hasan I. Tarazi A.( 2016) “Finance-growth nexus and dual-banking systems: Relative importance of Islamic banks”, Journal of Economic Behavior & Organization, 132 , p.198-215.
  • Alqahtani F., Mayes D.G. & Brown K. (2016) “Economic turmoil and Islamic banking: Evidence from the Gulf Cooperation Council, PacificBasin Finance Journal , 39 , p. 44–56
  • Akbar S., Shah S.Z.A. , Kalmadi S. (2012),"An Investigation of User Perceptions of Islamic Banking Practices in the United Kingdom", International Journal of Islamic and Middle Eastern Finance and Management, Vol. 5 Iss: 4 (Date online 23/10/2012)
  • Aysan A.F. , Disli M. , Ng A. & Ozturk H. (2016) “Is small the new big? Islamic banking for SMEs in Turkey”, Economic Modelling, 54 .
  • Aysan et al.(2017) “Religiosity versus rationality: Depositor behavior in Islamic and conventional banks”, Journal of Comparative Economics (2017), http://dx.doi.org/10.1016/j.jce.2017.03.001.
  • Bitar M., Madi P., Taramasco O.(2016) “ What makes Islamic banks different? A multivariate Approach”, Economic Systems , http://dx.doi.org/doi:10.1016/j.ecosys.2016.06.003.
  • Brown K., Azmat S., Skully M. ( 2015) “Can Islamic banking ever become Islamic?”, Pacific-Basin Finance Journal, 34 , p.253-272.
  • Buchari I. , Rafiki A. , Qassab M.A.H. (2015) “Awareness and attitudes of employees towards islamic banking products in Bahrain” 3rd Economics & Finance Conference, Rome, Italy, April 14-17, 2015 and 4th Economics & Finance Conference, London, UK, August 25-28, 2015.
  • Buchari I., Rafiki A. & Qassab M. A.H. (2014), “The Employees’ Awareness and Attitudes Towards Islamic Banking Products: a Survey of Islamic Banks in Bahrain”, World Applied Sciences Journal, 32(3), pp.436-443.
  • Chong B.s.& Ming-Hua Liu M.(2009) “Islamic banking: Interest-free or interest-based?”, Pacific-Basin Finance Journal, 17, p.125-144.
  • Imam P.& Kpodar K.(2016) “ Islamic banking: Good for growth?”, Economic Modelling, 59,pp.387-401.
  • Jawadi F., Jawadi N., Cheffou A.I Ameur H.B., Louhichi W.( 2017) “Modelling the effect of the geographical environment on Islamic banking performance: A panel quantile regression analysis”, Economic Modelling, Economic Modelling, http://dx.doi.org/10.1016/j.econmod.2017.01.018
  • Khattak N. & Ur-rehman K. (2010), “Customer Satisfaction and Awareness of Islamic Banking System in Pakistan”, African Journal of Business Management, 4(5), pp.662-671.
  • Kamla R.,& Alsoufi R.(2015) “Critical Muslim Intellectuals’ discourse and the issue of‘Interest’ (riba): Implications for Islamic accounting and banking”, Accounting Forum 39 , pp.140–154.
  • Kumru Ç.S. & Sarntisart S.(2016) “Banking for those unwilling to bank: Implications of Islamic banking systems”, Economic Modelling, 54 , pp.1-12.
  • Rahman J.U.I.Z. (2017)," Awareness and willingness towards Islamic banking among Muslims: an Indian perspective ", International Journal of Islamic and Middle Eastern Finance and Management, Vol. 10 Iss 1 pp. - Permanent link to this document:http://dx.doi.org/10.1108/IMEFM-01-2016-0017.
  • Rosman R. , Wahab N.A. & Zainol Z.(2014) “ Efficiency of Islamic banks during the financial crisis: An analysis of Middle Eastern and Asian countries”, Pacific-Basin Finance Journal, 28,pp. 76-90.
  • Okumus, 2005 “Interest-free banking in Turkey: a study of customer satisfaction and bank selection criteria”, Journal of Economic Cooperation. 2005, 26 (4) (2005), pp. 51-86.
  • Naser K. , Salem A.& Al, NUSEIBEH R. (2013), “Customers Awareness and Satisfaction of Islamic Banking Products and Services: Evidence from the Kuwait Finance House”, International Journal of Marketing Studies, 5(6).
  • Maswadeh S.N.(2014) “An Evaluation of SMEs Satisfaction toward Jordanian Islamic Banks Service Quality”, 2nd Global conference on business, economics, management and tourism, 30-31 October 2014, Prague, Czech Republic.
  • Mohammad J., Quoquab F., Omar R.(2016) “Factors Affecting Organizational Citizenship Behavior among Malaysian Bank Employees: The Moderating Role of Islamic Work Ethic”; 6th International Research Symposium in Service Management, IRSSM-6 2015, 11-15 August 2015, UiTM Sarawak, Kuching, Malaysia; Procedia - Social and Behavioral Sciences 224 , pp. 562- 570.
  • Saiti B.(2015) “The Awareness and Attitude towards Islamic Banking: A Study in Malaysia”, Global Review of Islamic Economics and Business, Vol. 2, No.3 , pp.172-196.
  • Subramaniam M. & Tanwani K.K. ( 2014) Perspectives of smes on the emergence of islamic banking in the sultanate of oman – the golden hands coming together for sustainable growth; ; International Journal of Humanities and Social Sciences (IJHSS), ISSN(P):2319-393X; ISSN(E): 2319-3948.
  • Wanke P. , Azad M.D.A.K.A, Barros C.P. (2016) “Predicting efficiency in Malaysian Islamic banks:A two-stage TOPSIS and neural networks approach”, Research in International Business and Finance, 36 , p. 485-498.
  • Wulandari D., & Subagio A.(2015) “Consumer Decision Making in Conventional Banks and Islamic Bank based on Quality of Service Perception”, 2nd Global Conference on Business and Social Science-2015, GCBSS-2015, 17-18 September 2015, Bali, Indonesia.
Year 2017, , 257 - 268, 30.06.2017
https://doi.org/10.17261/Pressacademia.2017.411

Abstract

References

  • Akerlof, G.A., (1970). The market for lemons: quality uncertainty and the market mechanism. Quarterly Journal of Economics, vol. 84, no. 3, p. 488-500.
  • Alessandri, T., Cerrato, D., Depperu, D. (2014). Organizational slack, experience and acquisition behavior across varying economic environments. Management Decision, vol. 56, no. 5, p. 967-982.
  • Abbas K.& Shirazi N.(2015) “The key players’ perception on the role of Islamic microfinance in poverty alleviation: The case of Pakistan”, Journal of Islamic Accounting and Business Research, Vol. 6 No. 2, pp. 244-267, DOI 10.1108/JIABR-06-2013-0017.
  • Abduh M. & Idrisov M.( 2014) “The Role of Awareness and Perceived Values upon the Acceptance of Islamic Banking and Finance in Dagestan”, Journal of Islamic Banking and Finance, July- Sept., pp.50-60.
  • Abedifara P., Hasan I. Tarazi A.( 2016) “Finance-growth nexus and dual-banking systems: Relative importance of Islamic banks”, Journal of Economic Behavior & Organization, 132 , p.198-215.
  • Alqahtani F., Mayes D.G. & Brown K. (2016) “Economic turmoil and Islamic banking: Evidence from the Gulf Cooperation Council, PacificBasin Finance Journal , 39 , p. 44–56
  • Akbar S., Shah S.Z.A. , Kalmadi S. (2012),"An Investigation of User Perceptions of Islamic Banking Practices in the United Kingdom", International Journal of Islamic and Middle Eastern Finance and Management, Vol. 5 Iss: 4 (Date online 23/10/2012)
  • Aysan A.F. , Disli M. , Ng A. & Ozturk H. (2016) “Is small the new big? Islamic banking for SMEs in Turkey”, Economic Modelling, 54 .
  • Aysan et al.(2017) “Religiosity versus rationality: Depositor behavior in Islamic and conventional banks”, Journal of Comparative Economics (2017), http://dx.doi.org/10.1016/j.jce.2017.03.001.
  • Bitar M., Madi P., Taramasco O.(2016) “ What makes Islamic banks different? A multivariate Approach”, Economic Systems , http://dx.doi.org/doi:10.1016/j.ecosys.2016.06.003.
  • Brown K., Azmat S., Skully M. ( 2015) “Can Islamic banking ever become Islamic?”, Pacific-Basin Finance Journal, 34 , p.253-272.
  • Buchari I. , Rafiki A. , Qassab M.A.H. (2015) “Awareness and attitudes of employees towards islamic banking products in Bahrain” 3rd Economics & Finance Conference, Rome, Italy, April 14-17, 2015 and 4th Economics & Finance Conference, London, UK, August 25-28, 2015.
  • Buchari I., Rafiki A. & Qassab M. A.H. (2014), “The Employees’ Awareness and Attitudes Towards Islamic Banking Products: a Survey of Islamic Banks in Bahrain”, World Applied Sciences Journal, 32(3), pp.436-443.
  • Chong B.s.& Ming-Hua Liu M.(2009) “Islamic banking: Interest-free or interest-based?”, Pacific-Basin Finance Journal, 17, p.125-144.
  • Imam P.& Kpodar K.(2016) “ Islamic banking: Good for growth?”, Economic Modelling, 59,pp.387-401.
  • Jawadi F., Jawadi N., Cheffou A.I Ameur H.B., Louhichi W.( 2017) “Modelling the effect of the geographical environment on Islamic banking performance: A panel quantile regression analysis”, Economic Modelling, Economic Modelling, http://dx.doi.org/10.1016/j.econmod.2017.01.018
  • Khattak N. & Ur-rehman K. (2010), “Customer Satisfaction and Awareness of Islamic Banking System in Pakistan”, African Journal of Business Management, 4(5), pp.662-671.
  • Kamla R.,& Alsoufi R.(2015) “Critical Muslim Intellectuals’ discourse and the issue of‘Interest’ (riba): Implications for Islamic accounting and banking”, Accounting Forum 39 , pp.140–154.
  • Kumru Ç.S. & Sarntisart S.(2016) “Banking for those unwilling to bank: Implications of Islamic banking systems”, Economic Modelling, 54 , pp.1-12.
  • Rahman J.U.I.Z. (2017)," Awareness and willingness towards Islamic banking among Muslims: an Indian perspective ", International Journal of Islamic and Middle Eastern Finance and Management, Vol. 10 Iss 1 pp. - Permanent link to this document:http://dx.doi.org/10.1108/IMEFM-01-2016-0017.
  • Rosman R. , Wahab N.A. & Zainol Z.(2014) “ Efficiency of Islamic banks during the financial crisis: An analysis of Middle Eastern and Asian countries”, Pacific-Basin Finance Journal, 28,pp. 76-90.
  • Okumus, 2005 “Interest-free banking in Turkey: a study of customer satisfaction and bank selection criteria”, Journal of Economic Cooperation. 2005, 26 (4) (2005), pp. 51-86.
  • Naser K. , Salem A.& Al, NUSEIBEH R. (2013), “Customers Awareness and Satisfaction of Islamic Banking Products and Services: Evidence from the Kuwait Finance House”, International Journal of Marketing Studies, 5(6).
  • Maswadeh S.N.(2014) “An Evaluation of SMEs Satisfaction toward Jordanian Islamic Banks Service Quality”, 2nd Global conference on business, economics, management and tourism, 30-31 October 2014, Prague, Czech Republic.
  • Mohammad J., Quoquab F., Omar R.(2016) “Factors Affecting Organizational Citizenship Behavior among Malaysian Bank Employees: The Moderating Role of Islamic Work Ethic”; 6th International Research Symposium in Service Management, IRSSM-6 2015, 11-15 August 2015, UiTM Sarawak, Kuching, Malaysia; Procedia - Social and Behavioral Sciences 224 , pp. 562- 570.
  • Saiti B.(2015) “The Awareness and Attitude towards Islamic Banking: A Study in Malaysia”, Global Review of Islamic Economics and Business, Vol. 2, No.3 , pp.172-196.
  • Subramaniam M. & Tanwani K.K. ( 2014) Perspectives of smes on the emergence of islamic banking in the sultanate of oman – the golden hands coming together for sustainable growth; ; International Journal of Humanities and Social Sciences (IJHSS), ISSN(P):2319-393X; ISSN(E): 2319-3948.
  • Wanke P. , Azad M.D.A.K.A, Barros C.P. (2016) “Predicting efficiency in Malaysian Islamic banks:A two-stage TOPSIS and neural networks approach”, Research in International Business and Finance, 36 , p. 485-498.
  • Wulandari D., & Subagio A.(2015) “Consumer Decision Making in Conventional Banks and Islamic Bank based on Quality of Service Perception”, 2nd Global Conference on Business and Social Science-2015, GCBSS-2015, 17-18 September 2015, Bali, Indonesia.
There are 29 citations in total.

Details

Journal Section Articles
Authors

Imran Aslan

Publication Date June 30, 2017
Published in Issue Year 2017

Cite

APA Aslan, I. (2017). INTEREST- FREE BANKING: REASONS FOR CHOOSING ISLAMIC BANKING IN BINGOL CITY. PressAcademia Procedia, 3(1), 257-268. https://doi.org/10.17261/Pressacademia.2017.411
AMA Aslan I. INTEREST- FREE BANKING: REASONS FOR CHOOSING ISLAMIC BANKING IN BINGOL CITY. PAP. June 2017;3(1):257-268. doi:10.17261/Pressacademia.2017.411
Chicago Aslan, Imran. “INTEREST- FREE BANKING: REASONS FOR CHOOSING ISLAMIC BANKING IN BINGOL CITY”. PressAcademia Procedia 3, no. 1 (June 2017): 257-68. https://doi.org/10.17261/Pressacademia.2017.411.
EndNote Aslan I (June 1, 2017) INTEREST- FREE BANKING: REASONS FOR CHOOSING ISLAMIC BANKING IN BINGOL CITY. PressAcademia Procedia 3 1 257–268.
IEEE I. Aslan, “INTEREST- FREE BANKING: REASONS FOR CHOOSING ISLAMIC BANKING IN BINGOL CITY”, PAP, vol. 3, no. 1, pp. 257–268, 2017, doi: 10.17261/Pressacademia.2017.411.
ISNAD Aslan, Imran. “INTEREST- FREE BANKING: REASONS FOR CHOOSING ISLAMIC BANKING IN BINGOL CITY”. PressAcademia Procedia 3/1 (June 2017), 257-268. https://doi.org/10.17261/Pressacademia.2017.411.
JAMA Aslan I. INTEREST- FREE BANKING: REASONS FOR CHOOSING ISLAMIC BANKING IN BINGOL CITY. PAP. 2017;3:257–268.
MLA Aslan, Imran. “INTEREST- FREE BANKING: REASONS FOR CHOOSING ISLAMIC BANKING IN BINGOL CITY”. PressAcademia Procedia, vol. 3, no. 1, 2017, pp. 257-68, doi:10.17261/Pressacademia.2017.411.
Vancouver Aslan I. INTEREST- FREE BANKING: REASONS FOR CHOOSING ISLAMIC BANKING IN BINGOL CITY. PAP. 2017;3(1):257-68.

PressAcademia Procedia (PAP) publishes proceedings of conferences, seminars and symposiums. PressAcademia Procedia aims to provide a source for academic researchers, practitioners and policy makers in the area of social and behavioral sciences, and engineering.

PressAcademia Procedia invites academic conferences for publishing their proceedings with a review of editorial board. Since PressAcademia Procedia is an double blind peer-reviewed open-access book, the manuscripts presented in the conferences can easily be reached by numerous researchers. Hence, PressAcademia Procedia increases the value of your conference for your participants. 

PressAcademia Procedia provides an ISBN for each Conference Proceeding Book and a DOI number for each manuscript published in this book.

PressAcademia Procedia is currently indexed by DRJI, J-Gate, International Scientific Indexing, ISRA, Root Indexing, SOBIAD, Scope, EuroPub, Journal Factor Indexing and InfoBase Indexing. 

Please contact to procedia@pressacademia.org for your conference proceedings.