Islamic banking and_finance_mba_disserta (1)

Islamic Banking and Finance:
Is it complementing or competing the conventional banks MBA
Dahang Bunchuan 1
ISLAMIC BANKING AND FINANCE: IS IT
COMPLEMENTING OR COMPETING THE
CONVENTIONAL BANKS
DAHANG BUNCHUAN
MBA
2006

Dahang Bunchuan 2
ISLAMIC BANKING AND FINANCE: IS IT
COMPLEMENTING OR COMPETING THE
CONVENTIONAL BANKS
By
DAHANG BUNCHUAN
Year of 2006
A dissertation in part of consideration for degree of Master in Business
Administration in Financial Studies at the University of Nottingham

Dahang Bunchuan 3
Abstract
The Islamic banking industry is still considered in its infancy period. However,
the growth is quite fast considering the type of business and the products that
they have. In Brunei Darussalam, Islamic banking has just started it operation
on January 1993, meaning to say that the industry is still at its growing stage.
The competition, however, for client base is very competitive due to the
market size in Brunei. The main objective for the set up of the Islamic banking
was as part of the fardhu kifayah (religious obligation) and providing the
Muslim population with halal venues for investing and funding their
businesses and personal needs.
This paper looks how Islamic bank start as a complementary product if not a
substitutes to the conventional banking financial instruments especially in the
Islamic Bank of Brunei context. Detail explanation of similarities of financial
instrument will be laid out in this paper. The emergence of western banking
giants opening-up subsidiaries or Islamic windows and competing directly has
created greater impacts on the banking industry in Brunei. This will be
determined by the bank’s performance, market share, strategic approach and
regulatory factors. Finally, addressing the issues and challenges faced by
Islamic Banking in the small economies. For example Countries like Brunei
with limited customer base and where the multinational banks has creep in
taking advantage of their expertise to win certain high profile financing
projects and in end recommending some suggestions on ‘how the local
Islamic bank need to react accordingly’.

Dahang Bunchuan 4
Glossary of Islamic finance terms
TERMS DEFINITION
Bai’ Bithaman
Ajil
(BBA)
This contract is referring to the sale and purchase
transaction for the purchase of assets with a deferred
payment basis and the payment period is pre-agreed.
The sale price will include a profit margin.
Gharar Gharar is an element of deception either because of
ignorance on the status of the goods, the price, or the
condition of the goods not consistent with the initial
description of the goods. In this case one or both parties
stand to be deceived through ignorance of an essential
element of exchange. As an example, lottery or gambling
is considered as a form of Gharar because the lottery
buyer or the gambler is ignorant of the result.
Ijarah A Contract whereby a lessor (owner) leases out an asset
or equipment to his client at an agreed rental fee with
pre-determined lease period once it was agreed. The
ownership of the leased equipment remains in the hands
of a lessor.
Ijarah Thumma
Al-Bai’
This is a contract that begins with an Ijarah contract for
the purpose of leasing the lessor’s asset to the lessee.
Subsequently, at the end of the lease period, the lessee
will buy the asset at an agreed price from a lessor by
executing a purchase (Bai’) contract.
Istisna’ A purchase order contract of assets whereby a buyer will
place an order to purchase an asset that will be delivered
in the future. In other words a buyer will require a seller
or a contractor to deliver or construct the asset that will
be completed in the future according to the specifications
given in the sale and purchase contract. Both parties to
the contract will decide on the sale and purchase prices
as they wish and the settlement can be delayed or
arranged based on the schedule of the work completed.
Kafalah It has the same meaning as Dhaman or in other word
guarantee. Kafalah is widely used in the Islamic Banking
especially in Trade finance and performance bond
guarantees.

Dahang Bunchuan 5
Mal Something likes asset or capital that has value and can
be used to gain profit according to Shariah.
Maisir Betting activities where normally the winner will take all
bets and the loser will lose all his bet. This is prohibited
by Shariah.
Mudharabah This contract usually made between two parties to
finance a business venture. The parties are called as
rabb-al-mal (investor) who solely provides the capital and
a mudarib (entrepreneur) solely manages the project.
The profit will be distributed based on a pre-agreed ratio
and if the business is making a loss, then it shall be
borne by the provider of the capital/investor.
Murabahah This that refers to the sale and purchase transaction of
an asset whereby the cost and profit margin (mark-up)
are agreed by all parties involved in the contract. The
settlement for the purchase can be done either on a
deferred lump sum basis or on an installment basis, and
must be specified in the agreement.
Musyarakah A joint venture or partnership arrangement between two
parties or more for a business venture whereby both or
all parties will contribute capital either in the form of cash
or in kind. Any profit derived from the venture will be
distributed based on a pre-agreed profit and loss sharing
ratio base on equity participation.
Qardh Hassan This is loan contract between two parties on the basis of
social welfare or benevolent loan. This is normally
reuired to fulfill a short-term financial need of the
borrower. The amount of repayment must be equivalent
to the amount borrowed. The borrower can pay more
than the amount borrowed he/she has borrowed at their
own discretion as long as it is not stated or agreed at the
point of contract.
Riba An increase in amount due to interest charges especially
in a loan transaction or in exchange of a commodity. The
amount accrues to the owner (lender) without giving an
equivalent counter value to the borrowing party. It covers
interest both on commercial and consumer loans that
were practiced by the conventional banks and this is
prohibited by Shari’ah.

Dahang Bunchuan 6
Sukuk A document or certificate, which evidences the undivided
pro-rata ownership of underlying assets – the sak
(singular of sukuk) is freely tradable at par, premium or
discount.
Shariah Islamic law, originating from the Qur’an (the holy book of
Islam), as well as practices and explanations rendered
by the prophet Muhammad (pbuh) and ijtihad of ulamak
(interpretation by qualified Shariah scholars to determine
the true ruling of the divine law in a subject matter on
which the revelation is not explicit).
Takaful This is a form of Islamic insurance based on the principle
of mutual assistance. It provides protection of assets and
property and practiced by offering joint risk sharing in the
event of a loss by one of its members. Takaful is similar
to mutual insurance in that members are the insurers as
well as the insured.
Wadiah Yad
Dhamanah
Wadiah is a trust; where the bank/depository becomes
the guarantor and guarantees repayment of the whole
amount of the deposits or any outstanding in the account
of depositors when demanded. The depositors are not
entitle to any share of the profits but normally the bank
may pays dividends to the depositors as a token of
appreciation for using the deposit for profit oriented
investment.
Zakat An Islamic tax on individual or corporation, which is
prescribed by Islam on all persons/corporation having
wealth above a certain amount which is fixed by the
Shariah. The objective of this zakat is where the
wealthier individual/corporation will contribute from part
of their wealth and to distribute it among the 8 categories
of recipient stated in the qur’an.

Dahang Bunchuan 7
TABLE OF CONTENTS
Page
Abstract 3
Glossary 4
Chapter 1: Introduction
1.1. Introduction: Why Islamic Banking? 9
1.1.1 Prohibition of Riba
1.1.2 Prohibition of Gharar
1.2. Golden rules of Business in Islam 13
1.3. Islamic banking financial instruments 15
Chapter 2: Literature Review
2.1 Competitive advantage of Islamic Banking 19
2.2 Competition in banking industry 23
2.3 Competition in Islamic banking perspective 26
2.4 Customers’ acceptance on Islamic banking 33
Chapter 3: Methodology
3.1 Research Question 37
3.2 Research methodology 37

Dahang Bunchuan 8
3.2.1 Questionnaires for banks’ managers
3.2.2 Questionnaires for bank’s customers (IBB’s customers)
Chapter 4: Background of Brunei Banking Industry
4.1. Banking industry in Brunei Darussalam 40
4.2 Industry size 41
4.3 Regulatory body 44
4.2. Brief History of the Islamic bank of Brunei Bhd 45
4.3. Performance analysis 46
Chapter 5: Research Findings
5.1 Respond from managers 51
5.2 Respond from customers 55
Chapter 6: Conclusion 61
Chapter 7: Recommendation 64
Appendix 66
I. Questionnaires for banks’ managers
II. Questionnaires for bank’s customers
Reference 73

Dahang Bunchuan 9
Chapter 1: Introduction
1.1. Why Islamic Banking?
Islamic Banking has been established since 1963 in Egypt in the city of
Ghamr as an experiment to cater the needs of the Muslim populations in
relation to their religious obligations (Al-Omar & Abdel-Haq, 1996). However,
due to political pressure it has to close down in 1967 but the idea and concept
of the interest free banking had caught up with a number of leaders in the
Muslim world that lead to the establishment of various interest free banks like
The Nasser Social Bank (Al-Suwaidi, 1994). Since then the Islamic banking
system has been spread throughout the world wherever there is a Muslim
population, other countries followed the same by opening their own Islamic
bank. Dubai Islamic Bank was opened in 1975 as the first private Islamic
institution and subsequently become the largest Islamic bank in 1987. The
Islamic banking concept not only became the epitome of the Middle East
countries but has spread to other part of the world especially South East Asia
where Malaysia has been playing an important role in case of modern Islamic
banking. Even the smallest Islamic nation Brunei Darussalam has also
adopted the Islamic banking in early 1993. In other words wherever there are
a significant numbers of Muslim populations there bound to have some form
of Islamic financial institution in order to cater for their needs.
The Islamic banking system provides an alternative for their banking needs
apart from the western or conventional banking which has been established
centuries before. The development of Islamic banking and finance took pace
in the last 2 decades. The remarkable success of Islamic banking in entering
the world of financial market posed some kind of threat to the conventional
banking. This was noticed by the conventional bankers in the last two
decades as the Islamic banking was taking greater market shares of deposits
and finance. Since the establishment of Islamic banking, the system was
considered a niche market player catering for special needs of the Muslim
population. However in real term the Islamic banking does not only cater for

Dahang Bunchuan 10
the Muslim population but also the non-Muslim who has taken advantage of
the system. This was particularly so in case of Brunei and Malaysia where the
non-Muslim were consisted of a big percentage of the total population.
The establishment of Islamic Banking has the same purpose as those
conventional banking to act as financial intermediaries between depositors
and the borrowers. However, in Islamic banking it was more than depositors
and borrowers relationship. It was more of partners where banks are
entrusted to invest and any profit generated will be shared (Kahf, 2002). This
notion of profit and loss sharing (PLS) is totally a different concept than the
conventional banking of depositors and borrowers relationship where the
depositors will receive interest based on the fund deposited into the bank’s
account and interest charged to the loan given. The growing concern on the
ill-effect of interest rate has led to some extend to the decline of traditional
banking activities. This decline has shifted away the role of money as
promissory notes and increase activities in profit sharing, equity rates and
other similar participatory instruments which encouraged more trade,
development and productivity in the society (Choudhury M.A., 2000). These
alternative activities have become popular among banks of both systems as it
has solved some of the issues relating to liquidity and credit risks.
Islamic bank was also established based on fardhu kifayah (religious
obligation) of the Muslim leader in providing an alternative way of banking and
investing to the Muslim population. It is part of the duty for the Head of state
for any Islamic state to ensure that the practice of Islam is strictly adhered to
and the provision of all necessary avenues for their subjects with facilities to
perform spiritual and social activities in accordance to the teaching of Islam is
a must.
When Islamic bank emerged as an alternative form of banking many people
scoop at that idea and some even say that it was just a marketing gimmick to
attract customers to their institutions. El-Gamal (2000) had shown his
unhappiness about this misconception on Islamic Banking which was not very
true at all and also totally absurd in understanding the actual meaning of

Dahang Bunchuan 11
Islamic Banking. El-Gamal (2000) used the Islamic Marriage as an analogy of
the differences between the Islamic banking and conventional banking. In this
instance the akad (contract) is needed to ensure that the couple will abide the
shari’ah (Islamic laws) which has been practised ever since Islam was born.
In other part of the world, the analogy used was on the cooking of chicken
curry by a Muslim cook and a non Muslim cook. The ingredient will still be the
same and the end result is also the same. However, the preparation of the
chicken to be cooked is totally different from the non-muslim cook then the
Muslim cook. This is a bit difficult to understand for the non-muslim unless
he/she used to live in the Muslim community for quite sometime. Difficult for
the non-muslim is very understandable but for the Muslim it’s rather
unbelievable. This is a very true scenario experienced by Islamic bankers all
around the world.
The shari’ah board within the Islamic bank is one of the factors that
differentiate it from the conventional bank. In conventional bank, any new
product innovation will only need approval from the board of directors after all
other economic consideration has been deliberated. In Islamic Bank, any new
product needs to be presented to the Shari’ah board for their approval without
which the bank’s board of directors has no power to implement any new
products. The shari’ah board will look all aspect of the new product in relation
to the Qur’an and hadith before having a consensus of approving it. This
board itself does not have any power in approving or deciding financing
application from the banks customers. Unlike the conventional bank, the
directors that approved the product are normally involved in decision of loan
request. This procedure ensures that the Islamic bank does not only pursue
its product innovation based on profit maximisation goal alone but a more
balance goal taking into consideration of social and religious aspect of it.
1.1.1 Prohibition of Riba
The prohibition of riba (usury) in Islam is one of the crucial factors that Islamic
banking comes into existence. Interest earned from deposits or charged to a

Dahang Bunchuan 12
loan is not permissible under the shari’ah law. Any transaction that has the
element of riba (usury) is against the teaching of Islam. Interest in whatever
form is considered haram (not permissible) or in other word making money
from money is not acceptable under Islam (Ahmad, M., 2004). Money used to
gain extra money without effort or labour is haram and if pursued it is as if
waging war against God and His Prophet (Ariff, M. 1988). Khan (1986) further
supported why riba is not allowed due to its negative distributive justice and
equity effects. Islam promotes socio-economic justice, fair and equitable
treatment to everybody irrespective of their social standing. Riba does not
care this concern and is more in exploitation modes especially to the poor
debtor by the rich creditor (Gamal. 2000). This unfairness clearly states why
riba is undesirable in the society either they are Muslim or not. If riba is
allowed widely the social imbalances will greatly impair every poor nation
effort to eradicate poverty and as we can see that most of the poor nations
are at the mercy of the richer nations.
Money in itself is a mode to store value and act as a medium of exchange.
When it is used as a commodity to create more money that is where it is
prohibited. This is because the only way that money can make money is
through interest earned or charged. This is what in the modern banking of
fixed deposit with fixed return of interest rates given by banks or if loan are
given a higher interest rates are chargeable. The passive return of money is
prohibited as they are not employed as part of capital in the economic sense
of it. This is where the Islamic bank plays its role in ensuring that money
supplied by depositors are treated as investment and return/profit are given to
the funds supplier based on the return on investment made by the bank
(Tannenbaum, 1998). That is why most of the investment deposit made by
depositors in Islamic bank does not provide a fixed return contract but rather
indications of how much the return will like be received at the end of the
maturity date.
In many other religion, usury are scorned (Judaism), criminal offence
(Christianity-Eight century under Charlemagne and when traced back to the
ancient western philosopher condemned it (Visser and McIntosh, 1998). So

Dahang Bunchuan 13
this was clearly that none of the major religion in the world ever supported
usury which was basically known to create more harm than good. This is not a
modern day phenomena but has already experience by our ancestors back
then. The only thing was that they did not create any credible alternative in
order to avoid usury. The emergence of the Islamic banking has provided the
much needed answers not only for the Muslim population but also for those
who are looking for a more ethical and promotes social justice treatment to
the society.
1.1.2 Prohibition of Gharar
Transactions under Islamic Banking should not have the elements of Gharar
(uncertainty, risk or speculative). Parties that are involve in a sale and
purchase contract must have a perfect knowledge of values of the intended
transactions and in the event of financing where profit and loss sharing for an
agreed venture, any profit to be generated cannot be guaranteed at the first
instance of the transaction (Ahmad, M., 2004). This prohibition is to avoid
uncertainty and act as a shield for the unfortunate in business dealings. It is
more on social justice where it creates a win-win situation. The logical
explanation is that business is very dependant on the future economic
situation which is subject to fluctuation and therefore the profit to be
generated cannot be guaranteed at the earlier stage. It was known that even
using the most sophisticated method of forecasting cash flows, the end result
usually deviate to a certain percentage from the initial forecasted figure.
Therefore both funds providers and the entrepreneur must share the risk that
is associated with a particular venture.
1.2. Golden rules of Business in Islam
Islamic transactions following the strictest form do not allow any business that
constitutes haram in the Qur’an. This is not limited to riba and gharar as
stated above in detail but also others that are deemed haram if proceeded.

Dahang Bunchuan 14
“Any activity which is not in conformity with the interest of the ummah is
tantamount to misuse and abuse of the wealth entrusted by God” (Thani et al,
2003. pp 16).
This is a clear reminder for the Islamic banking and finance practitioners to be
more aware of all the prohibitions as stated in the holy Qur’an. All transactions
must not involve in the business of alcohol, pork, entertainment or casino.
These are deemed to be haram and must not be indulged at all cost or at any
time by the Muslim. Hawary et al (2004) defined Islamic financial system
having four basic principles:
1. Risk sharing This relates to the banking term of symmetrical risk on
return which will be distributed to each of the participant
and is subject to the fluctuation of economy that the
transaction may faced during the tenor of contract.
2. Materiality The transaction must relate or linked to the real economic
transaction so there is an essence of “material finality”
which is essential in the shari’ah ruling on business
transaction.
3. No exploitation The idea of social justice in Islamic finance is an integral
part of the whole system. If there is any exploitation on
any party to the transaction then it deemed to be un-
Islamic therefore the transaction is not permissible.
4. Sinful activities There will be totally no financing for the haram (sinful)
base activities like the production of alcoholic beverages,
casinos, pork related business and other types of
business transactions that are not permissible under the

Dahang Bunchuan 15
Islamic law. Other transactions will be guided by the
shari’ah law that govern each country.
Normally the shari’ah laws will be interpreted in accordance of the school of
thought that they are following. There are four schools of thought in Islam and
each of them may have different interpretations on issues related to
transaction that need their advise and final approval to be practised by the
Islamic banks of the concerned country.
1.3. Islamic banking financial instruments
This research will also discuss on how the following Islamic banking financing
products act as a complementary to the conventional banking products. The
focus products are:
1. Ijarah (Lease, lease purchase)
Ijarah is similar to leasing where the financier will buy the “productive
asset” first and then rent it to the users who really need it. The reason
behind this purchase was that the user may have short of fund but can
pay rental payment over a period of time from the usage of the assets
(Al-Omar & Abdel-Haq, 1996). It was further clarified that both parties
must be well awared on the specification and value of the property
before any agreement can be done. The contract will be terminated at
the end of the leasing period with and the user has the option to buy at
a nominal value. The most common product used is Al - Ijara wa’Iqtina,
which is a lease-purchase agreement and is widely used for car leasing
activities replacing the hire purchase type of loan in the conventional
bank/finance company.

Dahang Bunchuan 16
2. Istisna (Deferred payment, deferred delivery)
This is very similar to forward contract instrument and popularly used in
project finance normally for the purchase of industrial equipments or
even housing. In this instance the manufacturer/contractor agrees to
manufacture/build and the finish good to be delivered at a given price
on a given date. In this contract the price may not be paid in advance
but in some cases progress payment are agreed between the buyer
and the manufacturer/contractor depending on the preference of the
contracting parties (El-Hawary et al, 2004).
3. Mudarabah (Trustee finance contract)
A profit sharing concept which is similar to limited partnership where
the bank provides the fund and the entrepreneur will provide his
management skill and business acumen. The bank will become the
Rabb-ul-mal (capital owner) providing capital to the mudarib
(entrepreneur) where the profits from the project financed are shared
between them with a fixed ratio. Loses will be borne by the Rab-ul-mal
and the mudarib will loose his time and effort in the project (El-Hawary
et al, 2004 and Al-Omar and Abdel-Haq, 1996).
4. Murabahah (Mark-up financing)
Commonly known as mark-up or cost plus sale and it is widely used for
trade and commodity similar to letter of credit in the conventional
banking context. In this instance the seller advise the buyer on his cost
of producing the product that has been specified. Then both parties
negotiated the profit margin for the products. The payment will be
made in instalments which should not exceed the total cost of the
products (Hawary et al, 2004 and Thani et al, 2003).

Dahang Bunchuan 17
5. Musyarakah (Equity participation)
This is commonly associated with a joint venture agreement between
the financier and the owner/s of the project. In this instance a
partnership agreement mimicking the venture capitalist approach in
which partners will have certain shares in finance and management of
the new joint venture. The sharing ratio is predetermined based on
shares that each partner has injected into the company. Meanwhile,
the profits are still dependant on the performance of the company in
the near future. In this contract losses will be shared according to the
share in the equity (Hawary et al, 2004 and Chapra, 2004).
6. Bai Bithaman A’ajil (Credit sale)
This financing is concerned to the buy and sale concept but with
deferred payment for a predetermined period of time. This is one of the
most popular Islamic banking transactions and is similar to Al-
Murabaha. However, the difference is that Murabaha is widely used in
the international trade meanwhile Bai Bithaman a’ajil is more domestic
kind of financing requirement. In this instance bank will buy assets or
properties and then sell the assets or properties at a defined price of
which the customers will pay on a deferred instalments basis. The
deferred instalment payment will be predetermined and agreed by both
parties (Thani et al, 2003).
These investment/financing products are widely used in most countries both
domestic as well as the international market. The usage will be dependant on
the shari’ah ruling of the particular Islamic bank or even the country shari’ah
body. The reason behind this was that each country may have a predominant
scholar that follows certain school of thought and thus their interpretations will
differ from the other school of thoughts. This further influenced the
implementation of the financing products for the particular bank in that
particular country. One of the unique example is the usage of Bai Bithaman

Dahang Bunchuan 18
Aajil (BBA) is very popular among the South-East Asian Islamic banks due to
the simplicity of contracts and easiness in relaying the message to the mass
population. The same concept, however, is not acceptable in the Middle East
banking system.

Dahang Bunchuan 19
Chapter 2: Literature Review
2.1 Competitive advantage of Islamic Banking
Islamic banking is basically a new financial system taking advantage of the
advanced conventional banking system. Despite of being new in the banking
world the system has its own competitive advantage when come to
competition with other established and seasoned banks. When these new
banking system is referred to the BCG (Boston Consulting Group), Islamic
banking will falls to a certain position depending on the market that they are
established and compete with.
Fig 1: Relative market share position
Stars Question marks (or
problem child)
Cash cows Dogs
Source: The BCG growth –share business portfolio matrix (Dobson et al,
2004)
For example, we can say about the Islamic Development Bank of Jeddah
(IDB). This bank’s competition orientation is not limited to the Saudi market
but rather more on a global scale. This is due to its size and capability to
compete internationally. This bank can be considered as a cash cows
company where it has excess of funds due to the glut of oil income from the
country that it has established. This is probably why it has been aggressive in
promoting its financial products in other parts of the world especially in South
East Asia.
High
(Faster than
the
economy as
a whole)
Low
(Slower
than the
economy as
a whole)
I
N
D
U
S
T
R
Y
G
R
O
W
T
H
R
A
T
E

Dahang Bunchuan 20
Meanwhile when we see the new Islamic Bank of Britain that was established
in August, 2004 (http://www.islamic-bank.com), it was clear that the bank
competing with the big established banks in a much matured market. The
intense competition from banks and non-banks in the UK and with the society
that are well versed with the conventional banking system, it can be a
daunting task for Islamic Bank of Britain to compete. In the matrix this bank
can fall in the Dogs category. The bank definitely has a very low share which
is basically due to the low growth markets. Maintaining good cash flow is very
crucial at this stage as the flow on income is rather limited and can pose
liquidity problem if they are not careful or prudent enough.
Banks or financial institutions where there are only minority of Muslim people
like in the USA will be categorised in box (Question marks also known as
problem child) The market for Islamic banking product has been growing even
in the USA but in capturing the market share it will be very difficult especially
after the 9/11 event. It was further aggravated by the regulatory requirement
in the USA that make Islamic Banking/finance has no venue for growth or to
compete fairly.
The Islamic Bank of Brunei can be considered as a Star as it is established in
one of the richest nation with oil and gas as its main income generator.
Couple with this the Head of state, His Majesty the Sultan promotes Islamic
banking in every venue that fit to his aspiration to make Brunei as the
international financial hub for Islamic banking and finance. The bank enjoys
high market share and has created a household name in the banking industry.
But due to the size of the economy the market matured faster and lending
activities are getting saturated. Getting deposits are very competitive and the
avenue for Islamic banking domestically is very limited.
Banking in general is a very competitive business. However Islamic bank has
strive by having a protective legislation in the country that they are establish
like Pakistan, Sudan, the Middle East and even to the small nation like Brunei.

Dahang Bunchuan 21
Islamic banking has created a unique competitive advantage in the banking
industry. Porter advocate that in order to achieve a competitive advantage the
organisation has to make choices of strategies that can fit to the market that
they are entering (Dobson et al, 2004). Since the Islamic banking used the
conventional banking system as a platform, the Islamic bank concern must
have their own uniqueness in order to compete with the existing seasoned
banks. This is what Islamic bank is offering, they create product differentiation
in order to attract depositors, investors and individuals to bank in with them. In
1997, Porter has mentioned that the existing banks have lacked the
differentiation strategy in their pursuit to get bigger and be more profitable. He
argued that merger is not a strategy for competition but rather a value
destroying efforts as the new entity will be clouded with unclear strategy in the
long run (www.bai.org). Islamic bank being new is just like an infant learning
to walk and developed skills that has been practised and also new one in
order to become different from others. The ability of Islamic bank to deliver
unique products to the market creates a new kind of value which becomes the
banks competitive strategy.
The other advantage in Islam is that they are always a very close community
where they always gather and get together minimum once a week like the
Friday prayers and not to mentioned other religious gathering. This gathering
is very crucial in disseminating information on Islamic banking products. This
type of close knit community is lacking in the western world and creates a
disadvantage for their banking marketing effort. So they resort to an
aggressive marketing ploy from posh advertisement on big TV screen at
major city centres to even approaching individual prospective customer.
Islamic banking began its introduction and spread information with the most
traditional mode of marketing i.e. through word of mouth. With the
advancement of technology, the marketing ploy has also developed
accordingly and tends to be more apparent and visible to the other
competitors.
The slow growth in the financial industry indicates that the market has
reached its maturity and need new products and ideas to rejuvenate it. Islamic

Dahang Bunchuan 22
banking offers an excellent global opportunity for growth and profitability by
serving the 1.6 billion Muslim populations and also million of other investors
who looks for ethical investment. The opportunities can be spread up to four
key market segments like global consumer banking, commercial banking,
global corporate banking and global investment banking (Matthews et al,
2004). The study was made in the UK on the potential market for Islamic
banking products and services especially on the mortgages segment. They
have identified the differences of the conventional mortgages to the Islamic
concept of mortgage which was using the Murabaha and Ijara concepts. The
differences between the two were that the conventional mortgage was based
on debit with interest while the Islamic banking used the equity base. In this
instance the bank and the customer share the equity or ownership as well as
the risk. There is no interest involved in the transaction compared to the
conventional mortgages and this has prohibited the element of usury in the
transaction.
The survival of Islamic banks was mainly due to the country’s regulation on
entry of new banks especially the foreign bank. Most of the Islamic banks
were established in the developing countries. The main concern was the
threat that they bring along in competition which they consider as unfair due to
the strong and stable present of the foreign bank. Meanwhile the local banks
especially the Islamic banks need to be protected for their initial survival.
Mishkin (2005) argues that the entry of foreign banks will promotes stability of
the financial system and creates more efficient banking system in the country.
He further defends his argument by saying that the existence of foreign bank
in the developing economies will act as an insulator to any domestic shocks.
This argument has its valid reason as banks were pressured on the global
competition no matter what the system they were adopting. The banking
playground is no longer limited to the domestic backyard but more on the
forefront and even over the hedge (cross border business transactions).

Dahang Bunchuan 23
2.2 Competition in Banking industry
Banks competes for customers either for their loan products or for deposits.
The reason for the competition in banking was that the majority of businesses
and household in any economy cannot be separated from banks. These
factors closely tied up with banks deposit, loans and other type of financial
services (Shaffer, 2003). The factor of demand and supply for businesses and
household in an economy was greatly dependant on the pricing of banks
products which was normally determined by the level of competition in the
business. The competition level will again depend on the scope of playing
ground i.e. either within the market or multimarket competition.
There was a popular saying says that the more the merrier but not in the case
in banking industry. Shaffer (2003) argues that the more banks exist in the
market the more it may create adverse borrower selection or moral hazard.
This issue is quite true when many banks chased after a few customers and
are likely that a single business has several borrowing from few different
banks which in a later stage create more loan loss to banks involved.
Normally in a concentrated market banks become more aggressive in their
marketing strategy in getting new customers or in other aspect providing new
loans in order to achieve their budgeted target. Because banks always faced
asymmetric information problem, the customers in this case always took
advantage by getting more loan in the hope that the intended investment can
repay back the loan.
The pricing of deposits and loans are usually the main tool in banks
competition. The fewer banks that compete in a market the more like they
charge higher interest rates which means there will be less activity in lending
and banks practiced more on credit rationing as competition heighten
(Zarutskie, R. 2006). In the finding, she mentioned that the effect of banks
competition was more apparent for private own firm than the big firm. Smaller
firm get less funding form the banks due to greater asymmetric information
problem than the older and bidder firm. The study does not indicate that

Dahang Bunchuan 24
increase banks competition will increase the supply of credit or investment but
more on its dependant on asymmetric information of the borrower.
In a high level of market concentration especially in a small economy, the loan
rates tend to be higher while the deposit rates are much lower than the rates
offered in a less concentrated banking market. The reason for this was due to
the fact that the local consumers and small businesses were very dependant
on the basic banking or financial services that were normally located within
the vicinity of their home or businesses (Hannan & Prager, 2004). This is one
of the reasons why banks still expand their reach to their customer by opening
up branches in certain strategic locations just to get closer to the potential
borrower and depositors/investors. Even with the emergence of advance
technology, branching out still is a viable option in getting bigger market share
which will enhances the banks total performance. Localisation was a strategy
that has been applied by HSBC for quite sometime and it proved to be an
envy strategy that needs attention from other banks. Based on this study it
was found out that the deposit rates were the same for any type of accounts
in the local areas that they have their banking branches. This aspect of pricing
remind us of the perfect competition scenario where the customers knows the
price offered by every vendors of the same product. Branching out has been
traditionally been the cornerstone of competition strategy for banks and
geographic location is always an important elements when they consider their
strategy in capturing the market share to the maximum they can. Banks that
have established their branches normally compete aggressively for deposits
compared to the multimarket bank because they can source out their fund
elsewhere which is cheaper and less volatile in nature. In term of pricing these
banks normally have a more uniform pricing strategy compared top the local
banks in which they have to tailor their price either on loans or deposit to suit
the local demand and supply condition.
The study on effect of single currency like the EMU has different competition
strategy. Bandt and Davis (2000) found out that in this situation cross border
competition will increase which is due to the downward pressure of
profitability. The competition will become more vigorous for loans, investments

Dahang Bunchuan 25
and other services in the banking industry. There was also a marked changed
of target revenue especially for the non interest income. This argument
support Llewellyn’s (1996) argument on the decline of traditional banking
where the big banks now aggressively pursue the off balance sheet activities.
Competition for the domestic market are monopolised by the smaller banks
due to their capability to adapt to the local environment meanwhile the bigger
banks will directly compete with the other bigger banks for the different
portfolio especially the large investment funding where the smaller bank are
not able to provide.
The level of competition is dependant on the market structure and the level of
concentration. The study made by Casu and Girardone
(https://www.essex.ac.uk/AFM/finance-discussion-papers/DP05-02.pdf)
found-out that in a concentrated market the level of competition will diminish
as the banks move towards monopolistic status. They also found out that the
more efficient bank will not compete directly and in an aggressively way in the
market. Based on the findings most of these efficient banks increase their
market share by merger and acquisition. This approach was consistent with
the theory of economies of scale and economies of scope where these big
banks can harness their capability due to their management capability and
technological prowess. These banks exploit their market by pursuing other
measures like cost cutting and improvement of processes so that they can
serve the customers in a more efficient way. This finding justifies the previous
findings on banks competition. The deregulation in the banking industry has
created a different mode of competition such as cross border and international
competition. This has affected the way Islamic banks compete by learning the
way conventional banks strategy does in the wake of globalisation. Islamic
banks being in its infants have taken advantage of the existing ready banking
infrastructure that was established by the conventional banks and has
modified it so that they are permissible in the shari’ah context. The most
apparent system that has been used by the Islamic finance was the Dow
Jones Islamic Index which was originally the conventional banking and
finance avenue for investment which has been restructured in a way that
suited the Islamic concept.

Dahang Bunchuan 26
The main growth of the banking industry will be at the Asia Pacific which is
ideal for the Islamic banking to prosper. In a report made by Deloitte (2005),
they have identified the so called hot spot for cross border investment in the
Asia Pacific. China, India and Thailand was having a high growth with
increased consumers affluence that demand a more sophisticated financial
product and services in their ever-changing market environment. Coincidently
these three countries have a significant number of Muslim populations that
may become the focused customers for any Islamic bank entering the market.
Thailand has responded to this by establishing an Islamic bank with equity
participation by The Islamic Bank of Brunei
(http://www.muslimnews.co.uk/news). India has established some Islamic
banks but does not function under the banking regulation but identified as
Non-Banking Financing Companies (Khan, 2001). However this initiative is
good enough for initial entry level to serve the Muslim population in that
country. As time goes by the regulation will be modified and changed to suit
the Islamic banking requirement especially with demand from international
customers and regulators alike. China has yet to be explored and the potential
are there as China has also a considerable number of Muslim populations but
the majority are in the interior which consist of the impoverished part of the
country. With a large base of Muslim populations, Islamic banks that wish to
enter the market will have the advantage especially in community banking in
uplifting their customers’ status gradually.
2.3 Competition in Islamic Banking perspective
Tilva and Tuli (www.globalwebpost.com) emphasize the growth impact of
Islamic banking and how it has changed the competitive environment to the
conventional banks. The growing sophistication of Islamic financial
instruments was the main driver for the stiff competition in the Islamic banking
industry. This factor has created large migration of funds from the
conventional banking system to the Islamic banking system. Another blow on
the western financial system is the emergence of the shari’ah compliant

Dahang Bunchuan 27
investment instruments available on the international market. The FTSE
Global Islamic Index (London Stock Exchange) and the Dow Jones Islamic
Market Index (NYSE) further provide alternative venue for Muslim investors
and also non-muslim that look for ethical investment. Brown, K., further
supported that Islamic bank is a viable option even though they are not as
profitable as the conventional banks. With protection from the government in
certain countries like Pakistan, Iran and Sudan, conventional bank has to find
ways to enter the market and unlike Malaysia their banking regulation allowed
banks to operate Islamic windows. This led to conventional banks to establish
their Islamic subsidiary and the prominent banks are HSBC with its HSBC
Amanah Finance and Citibank with its Islamic banking in the Middle East.
Other has follow suit in competing for deposits and project funding in that
regions.
Kahf, M. (2002) has stated that the strategic alliance that was formed between
the Muslim scholars and the bankers has stimulate a more sophisticated way
in engineering new financing modes which has been a successful factors in
the Islamic banking history. This led to the expansion of the Islamic banking
not constraint to their local/domestic market but more on becoming a global
player. The alliance between the ulamas (religious scholars) and the
practitioners has created a new dimension in the education world. Whereas,
in the western part of the world we can see that some of the experts are even
no-Muslim themselves. The interest on Islamic banking proved not only
exclusive for the Muslims but also the western practitioners who can foresee
the opportunity ahead.
These various factors and evidences have created a great impact on the
financial world especially to the conventional banking system. These threats
have been acknowledged by practitioners, academicians as well as politician.
“Islamic finance will become a very big, established player in project finance
over the next five years,” predicts Richard Duncan, who heads Islamic finance
at ANZ International Merchant Banking (Shepherd Jr, 1996). This is a strong
message from the practitioner of an Islamic banking and finance and there
were many evidences on this statement that make it a great concern to the

Dahang Bunchuan 28
conventional banks. The transformation of Islamic Banking has been very
dramatic for the last two decades where even the USA based Citibank has
been very active in pursuing the Islamic banking system especially in its
investment banking where they have a better advantage compared to other
banks in the Middle East.
Based on the analysis made by Iley and Megalli (2002), UBS initiative in
attracting Muslim customers proved the interest by Western bankers in
tapping the multi billion opportunity of investment has increased in recent the
last two decades. UBS being one of the largest banks in the world used its
Noriba Bank as its platform to reach its global Muslim customers supported by
their well equipped and experience workforce which are legendary. With
robust technology capability and the vast knowledge that they have make
them at a greater advantage in competing with the existing Islamic banks all
over the world.
Martin, J., (1997) reiterated this concern basically due to the acceptance of
Islamic financial instruments and the existence of demands from even
multinational companies like General Motors, IBM and Xerox. The concern
was addressed due to the growth of that particular sector which was
estimated at about 10 to 15 percent (Burghardt and FuB, 2004, El-Hawary et
al, 2004 and Zaher and Hassan, 2001:166). The phenomenon is no longer
constrained in the Islamic countries but even in the western soil like the U.S
and some part of Europe. The rise of conventional banks having dual system
create a stiffer competition for the Islamic banking that operates based on
single system. They will not have the benefit economies of scale and
economies of scope as what their adversaries are.
Llewellyn, D.T (1996) reiterated that banking in general faced a decline in
their comparative advantage due to pressure of competition in the market.
Their exclusivity and monopolistic status previously enjoyed has been eroded
due to changing regulatory requirement and government policy. Technology
advancement has been part of the lifeblood of banking operation and the
changes do directly change the way banks behaves. These aspects which

Dahang Bunchuan 29
have been a great concern among the conventional bankers are also affecting
the Islamic banking system even though they operate in a different system.
Since the Islamic banking system used the conventional banking platform,
whatever the development of banking in general will directly affect them too.
The secular decline of the traditional conventional banking has made them to
ponder on ways to gain further momentum in the banking business. As
avenue of the traditional banking has been fiercely competed the emergence
of Islamic banking has opened up doors for the conventional banks to pursue
in great depth into the system. The rise in oil prices further aggravated the
needs for western bankers to look more aggressive in attracting the excess
funds that these oil producing countries have which predominantly are Islamic
countries.
The growth of Islamic banking globally has a tremendous growth with
estimated US$500 billion in assets in 2006 and still is growing at the rate of
10% to 15% (www.investorsoffshore.com). This is a far cry from the 1970’s
when Islamic bank was first recognised in the banking world. The figure
mentioned is not as significant as it look when comparing to the total global
assets but looking at the contributors of 1.5 billion Muslim populations the
potential cannot be ignored. The majority of these Muslim populations are
also lives in the oil producing countries where the petrol dollars are keep on
growing as the oil prices keep rocketing up. So it is not a coincidence that the
extra funds generated from the oil income are mostly the Muslim nations and
these funds need to be deployed in a manner permissible under shari’ah law.
The acceptance of the Islamic Banking and Finance has created a new global
competition in this industry. Islamic banking is no longer belong to the domain
of the Muslim world but more on international perspective as investors and
project owners are looking for alternatives to the current conventional financial
system. The protective attitude of certain government in certain countries
need to be revisited on what are the benefits of having an open market and
allowing foreign banks to establish and compete in the domestic and
international market. It is no doubt that financial globalization does have their

Dahang Bunchuan 30
risks factor but the benefit does outweigh the risks. Schmukler S.L., (2004)
defend the idea that globalization does have its benefits especially on the
capital flows. The existence of capital flows into the country proved to be
beneficial for the country financial system. The borrower will have better
options in getting funding for projects and not too dependant on domestic
funds which in most cases proved to be expensive. The argument for
globalization does not limit to cheap funds but also extended to increase
transparency, improve corporate governance, increase technical capabilities
and improve business environment which involve other institutional.
Mishkin (2005) supported these arguments especially on transparency and
corporate governance supported by strong legal system which may reduce
corruption. A country with strong legal system may reduce moral hazard
problem that always arise in any financial system. When financial institution
foresee that they are less like they experiencing moral hazard problem its
motivate them to lend more which in return a better economic condition as
new investment can be pursued.
Banking industry is no different from the other type of business where
changes are inevitable and the speeds are getting faster to meet demand of
the sophisticated customers. Khan, M.F. (1999) believes that there were
several factors that drive these speed among which are;
1. Changing client needs for financing and investment
2. Strategies in cost reduction and efficiency
3. The emergence of new potential market with different market
structure
4. Advancement of technological aided products and services
5. Regulatory changes and pressure of modernisation
These factors did not only affecting the conventional bank but also the Islamic
banking system. Irrespective of the banks systems, they still need to compete
on the same playing field and the field sooner or later will become crowded by
existing and new players. Further to that, regulatory pressure has much

Dahang Bunchuan 31
greater impact on competition for the Islamic banks compare to the
conventional banks. It was further mentioned that a regulatory changes such
as the relaxing of the Glass-Steagall Act (1933) where before October 20,
1999 banks activities in the US are very restrictive in term of designing their
products and service and also were prohibited from engaging in securities
market which also include other investment activities like the sale of mutual
funds. With the relaxing of this act conventional bank can now operate other
services and opened up subsidiary for investment banking type of business
which is the main part of Islamic banking. The problem is that the US banks
has done so outside the US where they have operated an Islamic Banking
subsidiaries and compete with the existing Islamic banks for their customers.
The competition seems to be one sided as the conventional bank can operate
in both systems but for Islamic bank they cannot operate in the conventional
systems. This unbalance competition status justifies certain countries initiative
to have a protective regulation in term of new entrants.
Taylor’s (2003) found out that the main weakness of conventional commercial
banks is their restriction to own properties which applies in the US. This will
no doubt restrict Islamic banks activities that are going to be established in
that country. This restriction will affect more on certain products like Murabaha
(cost-plus financing) and Bai Bithaman Ajil (deferred payment financing).
However the regulation does not restrict the Ijarah (lease financing)
agreement due to the fact that leasing is the common feature of commercial
banking in the US. Due to this restriction there was no commercial Islamic
bank yet been established in the U.S. However to serve the needs of the
Muslim community, LARIBA Finance house has been established since 1987
in the city of Pasadena, California. Since then the finance house has spread
its existence to all over the states excluding New York. The main activities of
this finance house is giving financing to single family home and financing of
small and medium enterprise using the ijarah (leasing) and musyarakah (joint
venture) model (http://www.lariba.com/company/index.htm). HSBC Amanah
Finance has also established their presence in the US to get the market share
of the Muslim population that needs interest free banking services and
products. The competition now is not limited to conventional banking and

Dahang Bunchuan 32
Islamic banking in the Islamic countries but also in the west own turf. With the
openness of regulatory measures it is no doubt will put new pressures for the
existing conventional bank in the west especially in the US.
While the western countries still pondering on how to best suit the regulatory
changes for the Islamic banking the muslim countries like U.A.E in the Middle
East, Pakistan and Malaysia are trying to create a more stable and stronger
Islamic banking framework that can compete in the international financing and
investment arena. Malaysia has an aspiration of becoming an integrated
international Islamic financial hub by taking advantage of their Labuan
Offshore Financial Centre (LOFSA). This was mentioned by Dr Zeta Akhtar
Aziz, Governor of Central Bank of Malaysia at the ASLI’s World Islamic
Economic Forum in Kuala Lumpur in October 2005. She further says that
Islamic product become more attractive not only to the Muslim population but
also to the non-muslim which reflect the competitiveness of Islamic finance as
means of intermediation. Since 2004, Malaysia has liberalised its regulation
so that foreign Islamic banks can open and operate in Malaysia. Since then
there were three Islamic financial institution granted with licences. This
initiative support the argument made by Mishkin earlier where the existence of
foreign bank may contribute to financial stability of the country due to their
prudent, risk management capability and technological capability and can
cushion again any domestic economic shock in the future.
However so, the regulatory measures differ from country to country. With a
prediction that Islamic bank will attract 40% to 50% of the total saving of the
Muslim population globally in the near future create interest among the big
conventional banks like Citibank, Goldman Sachs, BNP-Paribas and UBS
who respectively has established Shari’ah compatible banks in countries that
they have identified with potentials (Hawary et al, 2004). This finding
supported Khan’s earlier concern on the encroachment of conventional banks’
subsidiaries in tapping the Muslims market. This concern has its own merit
and has been proven since the last two decades. One of the classic examples
is HSBC Amanah finance who not only established their presence in the
Middle East but also in other part of the world like Asia Pacific, Europe and

Dahang Bunchuan 33
Americas. Currently they even have 20 presences in OIC member states
which compete with the existing local Islamic banks in respective countries
(http://www.hsbcamanah.com). The other western bank that has successfully
encroached into the Islamic world is Citibank which has been dubbed as the
largest Islamic investment bank in the world.
All the above indicate that Islamic Banking system is not exclusively for the
Muslim world but also has more appeal to the international investors and
borrowers. Due to this pressure, the Islamic banks have to think how to
reposition themselves both in the domestic market as well as the international
arena in order to remain competitive and relevant to the banking industry.
2.4 Customers’ acceptance on Islamic banking
The level of customers’ acceptance on the Islamic banking products and
services is depending on how the banks market their products. The only niche
Islamic banking has been its shari’ah compliance products while the rest will
be subject to the normal marketing strategy in attracting and retaining their
customers. It is no doubt that the majority of the banks customers are the
Muslim population but bear in mind that not all the countries where Islamic
banks exist have a 100% Muslim population. So this mean those other non-
Muslim customers are also potential customers for the Islamic banking.
Therefore competition for new customers are more or less on a level playing
field and it is up to the individual bank’s marketing strategy to increase market
share in their respective domestic market or internationally. This situation was
acknowledged by Haron et al (1994) on their research on Islamic banks
customers in Malaysia. In their study it determined three of the followings:
- Muslims and non-Muslim banking preferences
- Difference in factors that influence their selection
- Perception of the benefits of services offered

Dahang Bunchuan 34
The study concluded that there were no significant differences in their
selection criteria or preferences. Therefore the notion that the products and
services of the Islamic Banking as a niche cannot be depended upon to
attract new customers who may have different motivators to do banking
business. The more apparent reason was that customers value their time due
to hectic schedules and most of the time the expectation of fast service is the
norm as customers need to complete their banking transaction as quickly as
possible.
It was further supported by another study made by Haron and Ahmad (2002)
on the perception of corporate customers toward the Islamic banking products
and services indicate a consistent finding. The finding was that religious
reason is not very crucial compare to the economics reason and how they see
their potential in the near future. As for companies the cost benefit was the
main focus of selection criteria on the selections of bank. This was followed by
delivery of service and the banks reputation as well as size. In other words the
majority of corporate customers will have to consider the benefit to their
company first and how the banks products and services can further enhanced
their performance indirectly in controlling cost and expenses.
The consumer behaviour toward the Islamic banks’ is very dependant on how
the products and services can influence their purchase and the effectiveness
of the delivery channels are. The degree of involvement is quite low for the
financial product as consumers are aware the basic features of the products
and services. This behaviour is called the repeat-passive where their pattern
of purchase is repeated and always describe as customers loyalty behaviour
(Beckett et al, 2000). The main reason for this behaviour is due to the
proximity of the banks to the customers and also the influence of family
members and friends. Beckett et al (2000) further strengthen this view by
saying that customers’ loyalty to banks was due to the switching costs that are
involved in the process. Differentiation was also the other reason why they do
not change their banks very often. Banks customers were normally motivated
by convenience and inertia and less willing to forge new relationship with
unknown new bankers. Crowe et al (2006) found out that new products and

Dahang Bunchuan 35
services like debit and credit card can play an important role in determining
customers’ choice in choosing their banks. As mentioned earlier, customer
values their time and wants fast and efficient services for their transactions.
Therefore the provision of credit card or debit card has become more
acceptable and widely used as a mode of payments and other type of
transaction. In the UK payment by debit card is a norm and widely used and
prove to be a potent part of banking service.
Any business organisation must have the understanding and can adapt to
customer motivation and behaviour which is considered as the very core
reason to stay competitive in order to survive in the ever changing needs
(Kotler, 1988 and Mclver & Naylor, 1986). The study made by Zainuddin et al
provides differences in perception between users and non users of Islamic
banking in Malaysia. The finding was very crucial for Islamic banking in
formulating their marketing strategy to attract potential customers as well as
retaining the existing customers. It was also concluded that those who are
married tend to know more on Islamic banking products and service and also
have a more stable income than the single and less income received. It also
consistently supported the previous studies made by different authors that
their decision was also influence by referral from family members, friends and
other relatives. In Malaysia and other part of the South East Asian countries it
is very common to have reference fro the close family members due to the
closeness of relationship of immediate family and other social groups.
The level of education also plays a very important factor for customers in the
Islamic banking. Based o the study made by Metawa and Almossawi (1998)
on two Bahrain Islamic banks, they have concluded that most of their
customers were educated with 40% at least hold a diploma and 50% hold
bachelor degree. This indicate that Islamic banks’ customer in Bahrain were
well educated and earn a very stable income. Education has helped them to
understand the Islamic banking concept better than the less educated
customer. Being a Muslim state itself the percentage of awareness on Islamic
Banking product was not very high. It was indicated that at least there were
30% not aware on the Islamic financing products and two third do not even

Dahang Bunchuan 36
use the facilities. This clearly indicates religion alone will not help in getting
the customers to bank in with the Islamic banks. Islamic bank has to market,
advertise and approach their prospective customers as part of their
awareness programme. Without marketing initiative they may lose to the
conventional banks that are very aggressive in their marketing and other
promotion just to make sure that their customers well inform of their product
and services.

Dahang Bunchuan 37
Chapter 3: Methodology of research
3.1 Research questions
The research question looked at in context of Islamic banking and finance and
the level of competition being faced by the Islamic banking and financial
institution from domestic and international pressures. When most of the
Islamic banks were introduced to the financial industry it was propagated as a
complementary system to the conventional banking system that has existed
for centuries. Various evidences show that it was not the case anymore as
these Islamic banks and finance institution is getting aggressive in getting
more market share either in the Muslim countries as well as in the western
countries. The literature review looks into the argument and evidence given
both by scholars and the practitioners alike.
3.2 Research methodology
In order to look into the level of competition in Brunei Darussalam, Islamic
Bank of Brunei were used as the main focus in this research. Questionnaires
were designed for the following:
a. Managers of banks, and
b. Customers of the bank (IBB customers)
Most of the previous researches were done focusing on the acceptance and
perception of the customers to the Islamic banking and there was no parallel
research on managers’ opinions on the competition that they faced from the
Islamic banking. The reason on designing the questionnaires for the
managers were that these people are the key strategist on marketing their
banking products in the wake of new competition or declining performance in
their bank.

Dahang Bunchuan 38
3.2.1 The bankers
The questionnaires to the bankers cover various aspects of influences that
trigger for stiff competition in the banking industry in Brunei. The influences
were based on Porters strategic competitive analysis method for determining
the competitive level of the particular industry. The competitive influences that
are going to be identified are the externals, customers, providers, barriers to
entry, replacement and the positioning of their organisation. These are the five
forces and generic competitive strategy that Porter advocate and widely used
by most businesses in formulating their competitive strategy.
3.2.2 The bank’s customers (IBB’s customers)
A second questionnaire will also be devised for the banks customers in order
to have balance opinions on the level of acceptance and preferences of the
Islamic banks against the conventional banks. The questionnaire was
translated into Malay language so that the respondent can have a better
understanding on what were required. This will also give a wider choice of
respondents with diverse backgrounds and different degree of education
levels. The other reason was that Malay is the first language while English is
only used as a second language.
3.2.3 Sample size
The sample size for the banks’ managers will be very limited to approximately
nine individual or less with greater emphasis on the main players or
competitors. Meanwhile as for the customers, the sample size will be a
minimum of 20 respondents of various backgrounds. This will provide a wide
view of respond on the customers’ preferences and acceptance on the system
as well as how they react to the aggressive marketing strategy of the
conventional banks.

Dahang Bunchuan 39
There are only nine banks in the Brunei; therefore the questionnaires sample
will be limited to that numbers only. The questionnaire focused only on the
main and active competitors in that particular industry. The active players in
the market are identified as follows;
i. HSBC
ii. MayBank
iii. Baiduri Bank
iv. TAIB (Islamic Trust Fund of Brunei)
v. Others financial institutions
The other five banks were also considered in the survey but not treated as
active player. Their views further add to the results of the survey on their
competitive strategy in the banking industry.
3.2.3 Limitation
There were some limitation in term of data and sample size. The data was
predominantly provided by the Financial Institution Division under Ministry of
Finance where the figure for year 2004 and 2005 was an indicative figure and
has not been finalised. As for the data from IBB, the figure was mostly taken
from the bank’s financial statement up to year and data supplied from the
bank’s Internal Audit Department. The banks statement for year 2004 and
2005 was not yet published and currently has been re-audited due to a
change in management. As additional information the bank’s management i.e.
board of directors were appointed by His Majesty the Sultan and their current
tenor to hold the management is only for two years.

Dahang Bunchuan 40
Chapter 4: Background of Brunei Banking Industry
4.1 Banking industry in Brunei Darussalam
Based on the work by Ebrahim M.S. (2001), the first bank that has established
in Brunei was in 1935 known as the post office bank which was later closed
and during the Japanese occupation all the data was destroyed. Hong Kong
and Shanghai Banking Corporation established its branch in mid 1940’s just
after the war. Then Standard Chartered Bank follow suit but a bit later in 1958.
Being a British protected country, the banking system used was under the
English law. Taking advantage of this was other banks that also opened their
branches in Brunei. The banks were Malayan Banking (1960), United
Malayan Banking Corporation (1963) now know as RHB Bank (Rashid Hussin
Bank), Overseas Union Bank (1973) and Citibank in 1973. The industry can
be considered as being controlled by the all these foreign banks. Only in
1964, the first local bank was established under the name of National Bank of
Brunei Berhad but unfortunately has to close down in 1980’s. At the same era
a new bank was established under the name of Island Development bank
which was generally concentrating its business of financing contractors for the
new palace that was built at that time. None of these bank operate under
Islamic concept which was basically that during that time Islamic banking
concept has only started in some middle-east countries but has not yet widely
known or accepted by the banking industry at that time. During that period
Brunei faced two bank failures, one is the Post Office Saving Banks and the
other one is the National Bank of Brunei Berhad. The Post Office Saving bank
was closed down due to war and the later was due to various problems
liquidity and other mismanaged loan transactions.
As of to date there are 9 banks operating in Brunei of which 6 are foreign
banks which are represented by their branches. The 3 local banks comprised
of 2 Islamic banks and 1 conventional bank. These bank operate based on
traditional banking activities like accepting deposits, provision of loans, issuing

Dahang Bunchuan 41
bank guarantee, fund management, issuing letter of credit and money
changer management (http://www.finance.gov.bn).
The Brunei population and corporate customers mainly get their loans and
credits from the banks and other financial institutions within the country. There
is no security market yet available in the country thus no stock exchange
activities for investors to look into. However, some banks provide brokerage
services like Baiduri Bank Bhd, HSBC and Islamic Bank’s subsidiary under
the name of IBB Securities Sdn Bhd where investors can trade their stock and
shares. The brokerage activities were on a minimal level and act only as value
added services for their customers.
4.2 Industry size
Being a small country with the economy dependant on income from oil and
gas, the banking industry has grown rapidly for the last decades especially
after the recover from the Asian financial crisis that has indirectly affected the
country. The country’s economy was mainly affected by the collapse of a
conglomerate company known as Amedeo Corporation that brings the
country’s main economic activity i.e. constructions industry to almost a
standstill.
The banking industry are very dependant on the income from external trade
ranging like BND7 to BND8 billion per year where the income from oil and gas
alone BND3 to BND4 billion per annum. Based on the statistical figure
supplied by the Financial Institution Division, Ministry of Finance (FID) the
total banking industry size is shown in the following graphs.

Dahang Bunchuan 42
Figure 2: Assets of Bank from 2000 - 2005
Assets of bank
0.00
2000.00
4000.00
6000.00
8000.00
10000.00
12000.00
14000.00
16000.00
18000.00
2000 2001 2002 2003 2004 2005
Year
Amount(million)
Cash
Amount due from
banks
Loans and advances
Investments
Other assets
Total assets
Source: Financial Institution Division, Ministry of Finance
In fig. 2 the total assets of banks in Brunei Darussalam was about BND16
billion in 2005 which was an increase from BND11 billion in 2000. It can be
seen that the loan and advances is the main activities for banks in Brunei
where it ranges from BND4 billion to BND5 billion. The main reason was that
there were lacks of big mega projects that require more sophisticated
financing requirements in the country. All the loan and advances were mainly
done on domestic market only. Due to lacks of avenue fro investment the
activities was very low and diverted into inter-bank placement which generate
very low return of between 0.75% to 1.75% p.a. (Bank Association of Brunei).
Relying on about 169.2 thousand of working population shared by 9 banks is
a very tough task in maintaining or getting market shares. The majority of
loans were consumed by the employees of the government and Brunei Shell
Petroleum which form the largest employers in the country. The loans granted
ranges from consumer loans up to mortgages. The other private sector
employees were normally not eligible for consumer or mortgage loan due to
their perceived instability of employment.

Dahang Bunchuan 43
Fig 3: Bank liabilities from 2000 - 2005
Bank liabilities
-
2,000.00
4,000.00
6,000.00
8,000.00
10,000.00
12,000.00
14,000.00
16,000.00
18,000.00
2000
2001
2002
2003
2004
2005
Year
Amount(BNDinMillion)
Deposits
Other liabilities
Amount due to banks
Total Liabilities
Source: Financial Institution Division, Ministry of Finance
The main source or supplies of deposits were the Brunei Shell Petroleum and
the Brunei Government. There were also other big companies like Royal
Brunei Airlines and Datastream Technology but does not constitute any major
influence for the supply. The other supplier was the small and medium
enterprises that consist of at least 95% of the total companies registered in
the country. In Fig.3 above shows that the total deposit does increased quite
significantly after the recovery of the financial turmoil that country faced in
1997 up to 1999 on the reason that was mentioned earlier. The total deposit
in 2005 was BND12 billion compared to BND10 billion in 2000. The rise was
mainly due to the increase of oil prices while lending activities has
experiencing its saturation for the last 5 years as can be seen in fig.----. There
was no significant venue for any expansion on the loan and advances to
increase due to the lack or market dynamism.
Furthermore Brunei economy is a government expenditure driven which mean
that the private sectors does not have great influences on the economy in
general. During the period of 1997 up to 1999, the government has cut off
budgets on certain industry especially on infrastructure and construction
industry and at the same time the country also experience credit crunch. The

Dahang Bunchuan 44
credit crunch was mainly due to the collapse of the conglomerate Amedeo
Corporation which has brought down other businesses either directly related
to the company’s project or indirectly. This period was also seeing the decline
in demand for mortgage loans on houses for rental. This period also record
the highest level of loan defaults especially mortgage and vehicle loans.
Companies wind up or goes into liquidation and in certain cases goes into
bankruptcy case. The government in its effort to recover has injected BND200
million as a life saving package for the SME in the country but this does not
help much due to the dwindling demand in the private sector.
4.3 Regulatory body
There is no central bank in Brunei and the regulatory power in the hand of
Ministry of Finance. The ministry assigned the supervision task to The
Financial Institution Division (FID) for all banks and financial institutions in the
country. The mission of this division is “to develop a sound, dynamic and
innovative financial system in Brunei Darussalam”
(http://www.finance.gov.bn/bahagian/bik/bik_mission.htm).
The Brunei currency board (BCB) is one of the crucial divisions within the
Ministry of Finance. This division initially handled the supervision of all the
banking and financial institution before the establishment of FID in 1993.
Without the supervision task this division now has the responsibility of issuing
the country notes and coins and control the circulation of the Brunei Currency
in the market. Brunei has also set an agreement with Singapore of currency
inter-changeability at par dated since the early 1960’s
(http://www.finance.gov.bn/bcb/bcb_index.htm).
Another milestone that the Ministry of Finance has achieved was the
establishment of The Brunei International Financial Centre (BIFC). This
department has the responsibility to introduce new international legislation to
the country pertaining to the drive of making Brunei as the financial centre of
the region. As of to date the department has introduce the Banking Order

Dahang Bunchuan 45
(2000), International Business Companies Order (2000), Securities Order
(2001), International Insurance and Takaful Order and others that are in the
pipeline. These new orders provide Brunei a new platform in establishing
wider banking and finance activities not limited to domestic market but more
on regional and global arena. This dual jurisdiction will hopefully make Brunei
more attractive to investors and other banks to establish their business taking
advantage of the low tax and other first class infrastructure that the country
can offer (http://www.bifc.finance.gov.bn/).
4.4 Brief history of The Islamic Bank of Brunei Bhd (IBB)
The origin of Islamic bank of Brunei Bhd can be traced back in July 1980
when it was first incorporated as Island Development Bank Berhad. Then in
June 1986 there was a big reshuffle with the appointment of local directors
which comprised of government official from the Ministry of Finance. The bank
then changed its name into The International Bank of Brunei Berhad. Since
the bank was established, the operation was mainly based on conventional
system of banking.
On 13th
January 1993, by command of His Majesty the Sultan, The
International Bank of Brunei was converted into an Islamic bank and changed
its name to The Islamic Bank of Brunei Berhad (IBB). The whole bank’s
operation was converted from the conventional banking system to the new
Islamic Banking system. It was a daunting task in the conversion exercise as
most of the employees have no prior knowledge on Islamic Banking system.
The success of the conversion was basically due to the assistant made by
Bank Islam Malaysia with all the training provided continuously.
The second Islamic bank was also a conversion of another conventional bank
known as Development Bank of Brunei Bhd and after conversion it was
named as Islamic Development Bank of Brunei Bhd. This bank was 100%
government owned bank and was established to take over the duty of the
Economic Development Unit where its function was giving a special financial

Dahang Bunchuan 46
assistance to the local businessmen in setting up their business. The
conversion was officiated by his Majesty the Sultan on July 2000. The main
activity of this bank was on corporate lending in line with the development
plan of the country.
4.5 Performance analysis
IBB performance was tremendously made a great impact on the banking
industry in Brunei. The performance of the last 9 years can be seen as
following summary of income statement derived from the bank’s financial
statement from 1996 to 2004.
Table 1: Income and profit after zakat and tax
1997 1998 1999 2000 2001 2002 2003 2004
Income earned 67.99 72.64 84.83 117.10 147.33 127.38 137.14 135.26
Profit after zakat and
taxation
8.04 8.91 13.84 23.22 30.79 18.01 20.47 31.75
Source: IBB’s financial statement from 1997 to 2004
The year 1997 was the fifth year that the bank was in operation as Islamic
bank and the income generated was BND67.99 million which later has risen
steeply up to BND147.33 million and falls again to BND127.38 million in 2002.
After this year the income rises slowly up to BND135.26 million in 2004. In
1997 the year was synonymous with the Asian financial crisis that has
affected the region. Brunei was not isolated from the crisis. In fact the crisis in
Brunei was due to the collapse of a conglomerate company called Amedeo
that bring the whole Brunei economy to almost a standstill. There was a credit
crunch as most banks are reluctant to provide loan or finance to companies
related to construction industry. That time period also saw a few changes in
the Ministry leadership and directly affected the management of IBB. In the
middle of 1997, new management has taken over and help to steer away the
bank from inertia.

Dahang Bunchuan 47
Fig 3: Number of deposit accounts from 1997 – 2003
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
No of
accounts
1997 1999 2001 2003
Years
No. of deposit accounts from 1997 - 2003
No. of deposit accounts
Source: IBB Internal Audit Dept.
IBB’s popularity can be seen in its performance in attracting new customers in
maintaining accounts with the bank. From a modest 4 thousand odd accounts
in 1993, the bank has since played a major role in the life of Brunei
population. In 1997, the accounts holders has increased to 51,964 and has
since then it peaked up at 90 plus accounts in 2003. That was a 76% increase
from the figure in 1997. The Islamic banking concept has shown its capability
in getting much bigger market shares. From the account opened with the
bank, it has secured a market share of about 30% which was a far cry from
the 15% market share 1997. The reason for the big increase in accountholder
was that from 1997 the bank has designed aggressive road shows activities
targeting mainly the army and the government employees.
The reason behind this was that the army form a large section of citizen
employed on a fulltime basis and these army personnel become unofficial
marketing agent for the bank when they reach home. The same with the
government employees where there are about 50 thousand plus employed
(JPKE, 2004). The Brunei culture of being a close community does help the
banks marketing initiative tremendously especially in spreading the message
from the road shows. The information was spread very fast and in a certain
point of time the bank’s personnel has to arrange special session for opening

Dahang Bunchuan 48
of account in the customers work location. This has help to speed up the
process and proved to be very convenient for both parties.
Fig 4: Assets and liabilities from 1997 - 2003
Assets and Liabilities from 1997 - 2003
0
0.5
1
1.5
2
2.5
1997 1998 1999 2000 2001 2002 2003
Years
BNDinmillion
Assets
Liabilities
Source: IBB’s financial statement from 1997 to 2003
The banks total assets have also grown tremendously from BND0.92 billion
1998 to BND2.02 billion in 2003. The growth has more or less has peaked in
2000 with assets value of BND1.92 billion and since then it declines slightly
but regain the position in 2003 of BND2.02 billion. The explanation for this fast
growth was that since Brunei is a small country with small economic base, the
bank can influence the market quite easily due to the fact that the
establishment was mooted by the Head of State himself. The market has
become saturated quite fast mainly due to the size of the economy and the
lack of sophisticated private sector’s activities. Conventional banks realising
that Islamic bank does not only attract Muslim customers but also the non-
Muslim they also began to take an aggressive and defensive strategy in
retaining their customers. The non-Muslim shift their banking relationship to
the Islamic banking which justifies the herding effect mentioned by Golec, J.
(1997). This theory suggested that people were always influence by the
masses no matter what believe they have and without even knowing why.

Dahang Bunchuan 49
The deposit growth was mainly due to the support given by the government
and other major institutions. Since most of the banks customers were
employed by the government naturally the government placed most of their
funds with the bank. This followed by other big institution like Royal Brunei
Airlines, Data-stream Technology and the Majlis Ugama Islam Brunei (Brunei
Islamic council) who hold a big chunk of the zakat funds. Tabung Amanah
Pekerja (TAP) is an employee provident fund organisation which has been
established in 1993 has also become the major contributors for deposit to the
bank.
Fig 5: Total Income and profit after tax and zakat 1997 - 2003
Total income and profit after tax and zakat 1997 -
2003
0
50
100
150
200
1997 1998 1999 2000 2001 2002 2003
Year
BNDinmillion
Total income
Profit after zakat and tax
Source: IBB’s financial statement from 1997 - 2003
Consistent with the growth of the bank’s assets, the income and profit after
tax and zakat show the same trend. 2001 being the height of the bank’s
performance where it has recorded the highest profit of BND30.79 million
compared to other years which shows fluctuation in trends. The fluctuation
was mainly due to the movement of bank’s customer from IBB to other banks.
Based on the bank’s marketing reports there were at least 10% of customers
who always transfer their account whenever there is new offers from other
banks. This percentage was quite difficult to maintain due to their lack of
loyalty and does not bother on price and the banking concept.

Dahang Bunchuan 50
Fig 6: Financing trends from 1997 – 2003
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
BND in million
1997 1999 2001 2003
Years
Financing trends from 1997 - 2003
Gross financing before
provision of loan loses
Net financing after
provision of loan loses
Source: IBB’s financial statement from 1997 - 2003
Financing was the main activity for IBB as well as for the other banks in the
country. Looking at the trend, the bank has aggressively gaining its market
share by giving out financing to its customers. In 2000 the financing volume
shot-up to BND1.55 billion compared to BND 0.78 billion in 1997 and ever
since that has maintained at above BND 1 billion mark.
The banks capital to assets ratio indicated the health of the bank in general. In
2002 the ratio was 9.38% and has reduced to 8.64% in 2003. In 2004 the ratio
remained same at about 8.85%. The assets were managed quite well and the
bank future can be assured if these factors continuously maintained.

Dahang Bunchuan 51
Chapter 5: Research finding
5.1 Respond from managers
The questionnaires were distributed to nine managers that as stated earlier
and only seven respondents have given their feedback. The data have been
employed based on descriptive statistics due to the sample size and for easy
understanding.
Profile of the respondents is presented in table 2
Table 2: Profile of respondents
Years of service Type of banksPosition No
Above 5yrs Above 10 yrs Islamic Conventional
Manager 2 1 1 1 1
Senior
Manager
5 5 5
From table 2 it is clear that 6 out of 7 respondents were having more than10
years experience in their respective banks. This furthermore makes the
finding more substance on their view of how their banks responded to the
competitive pressure from the Islamic banks. The respondents were also
dominated by conventional banks managers where 6 of them were working
with the conventional banks while 1 works with an Islamic bank. Most of the
respondents were considered seasoned bankers in Brunei.
Table 2 shows that the managers’ have consistent views on external
influences that affect their banks’ competitive strategy. The various factors as
stated in the questionnaire do have a direct correlation and impact on the
banking industry competitive strategy ever since the establishment of Islamic
banking.

Dahang Bunchuan 52
Table 3: External influences
Description of external influences Yes No
Direct competitor 6 1
Comparable product mix 5 2
Distribution channels 5 2
It was clearly shows that the Islamic bank does directly compete with the
conventional banks and it was on an aggressive mode. Only one respondent
does not agree that the Islamic bank pose a threat mainly due to their market
segment that they are servicing at the moment. Meanwhile on the product mix
two respondents says that the Islamic banking product is not comparable to
their products which means Islamic bank still have more rooms for
improvement in order to close the gap. The distribution channels were
considered as having a considerable threat or influences in their competition
for market share by 5 managers while two of the banks do not say so. The
reason why the two banks does not perceived that the distribution channel as
being a threat to them was basically that being two of the pioneers banks set
up in Brunei, they have the privilege to open up branches all over the country,
while the other banks does not have this privilege to do so. The Islamic bank
naturally being a local bank has an advantage over their foreign counter parts.
The Islamic banks can easily get an approval from the authority for setting up
new branches all around the countries. As of to date there were only five
banks that have branches all over the country. The banks are, HSBC, SCB,
IBB, IDBB and Baiduri Bank. Only HSBC and IBB have the most branches
countrywide. IBB has 13 branches while HSBC has 12 with the rest having
less than 8 branches. Three of them are local bank and the reminders are
foreign banks. The country’s regulations do play an important role in
determining the level of competition in the country. The protective mode for
the local banks does help them to survive against the advance and well
developed foreign bank with the exception to the two banks mention earlier.
The respondents acknowledge that the Islamic banks were very aggressive in
their marketing strategy which has greatly affected them tremendously.

Dahang Bunchuan 53
All foreign and one local non Islamic bank acknowledged that the country’s
socio-cultural and religious conditions would effect them in long run. This
worried does have their merits due to the fact that on almost every Friday
prayers sermon, the imams address on the importance of doing banking
transaction with the Islamic banks. They always remind the country’s Muslim
population that the country leader has provided them an alternative banking
system as part of his fardhu kifayah for the Muslim ummah. This kind of
indirect advertising and promotion for the Islamic banks helps tremendously in
seducing the Muslim to do their banking in the Islamic concept. Despite from
the threat the bankers perceived that they still have opportunity especially
looking at the country’s economic condition and the banks technological
acumens. The conventional banks have a better advantage in terms of
technology and product innovation and they can well harness these
capabilities.
Customers influences is the main cause why banks exist as most of the banks
have Muslim customer as majority except one where there have equal ratio of
muslim and non Muslim customers. The reason for the equal ratio can be
explained by saying that the bank’s target market was basically the Chinese
population in the country who comprised of businessmen and most of them
are loyal customers of the bank. The others were due to their wide distribution
channels where it reached most of the population in the four districts of the
country. Despite of all these difficulties the foreign banks which are mostly
conventional banks have a positive attitude by saying that they do identifies
other type of potential customers.
Table 4: Responds of supplier of fund and strategy to maintain
StrategyInvestors movement No
Pricing Services
Shift to Islamic banking 5 5 2
Remain with conventional banks 1 5 2
Depend on return 1 - -

Dahang Bunchuan 54
The banks supplier of fund is very crucial factor for both liquidity and financing
and loans aspect. In Brunei the big institutions like the Brunei Government,
Brunei Shell and the others that was mentioned earlier are the main supplier
for fund to the banks. Since the His Majesty vision in making Brunei as the
Islamic Financial centre naturally it steered the institution investing or fund
placement mode to the Islamic banking concept. From the respondents’
answers, they do feel that the fund placement shifted to the Islamic banking
concept. Five of the seven respondents agreed to this. One respondent says
it is still remains the same and the other one says that the fund placement is
dependant on the return. As for some of the foreign bank they have used their
Islamic subsidiary in maintaining the supply while others depends on other
strategies. The majority of the banks’ manager says they used pricing as the
main strategy in maintaining the deposits while the reminder two used
services. It was quite clear that in most of the cases economic consideration
was still the main criteria in placing funds with the banks in Brunei. The
supplier influence is quite strong in Brunei due to the fact that the private
sector is very dependant of Government expenditure and the income from oil
and gas.
According to the respondents, to enter the market by establishing a new
Islamic Banking locally is not possible at the moment due to the regulatory
constraint. HSBC has reiterated that they would like to open up their HSBC
Amanah Finance in Brunei but was turn down by the authority. SCB and
Baiduri bank has applied for an Islamic window like what the Malaysian bank
has practiced but was not acted favourably. However, with the formation of
the Brunei International Financial Centre (BIFC), the respondent perceived
that there will be certain level of competition on both and international level.
The reason was that BIFC allows foreign banks to establish their office in
Brunei and will have some/limited domestic transaction.
The respondents of the conventional banks was very optimistic that their bank
can still be very competitive based on their capacity and capabilities in term of
processing speeds, varieties of products and services. They were very
confident that there will always be customers that need their products and

Islamic banking and_finance_mba_disserta (1)

Islamic banking and_finance_mba_disserta (1)

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Islamic banking and_finance_mba_disserta (1)

Similar to Islamic banking and_finance_mba_disserta (1) (20)

Recently uploaded

Recently uploaded (20)

Islamic banking and_finance_mba_disserta (1)