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Article No.

1 Summary
A Comparative Study of Islamic Banking in Pakistan: Proposing and Testing a
Model by Ashfaq Ahmad (2009)
This study examines the relationship between service quality, customer satisfaction and bank
performance by conducting a comparative analysis of Islamic banks and conventional banks in
Pakistan. Inception of Islamic banking in Pakistan has created multiple challenges for banking

The results indicates a strong positive relationship between service quality and customer satisfaction
in the banking sector of Pakistan. Findings shows that service quality and customer satisfaction have
weak influence on performance of banks. The study has a number of implications for bankers, policy
makers and academicians.

Article No. 2 Summary

Comparison of Islamic and Conventional Banking in Pakistan by Abdul Ghafoor
Awan (2009)
Islamic Banking is growing with fast speed all over the world particularly in Pakistan while the
conventional banking is surprisingly declining in the countries which are the champion of capitalism
and founder of interest-based financial system. Keeping this objective in mind the author has analyzed
the vertical growth of Islamic banking and compared it with its counterpart conventional banking.

The results of the study are very encouraging because the performance and profitability of Islamic
banks are far better than selected conventional banks. Islamic banks outperform conventional banks in
assets, deposits, financing, investments, efficiency, and quality of services and recovery of loans. It
predicts the bright future of Islamic banking in Pakistan.

Article No. 3 Summary

Islamic Banking: True Modes of Financing
By Dr. Shahid Hasan Siddiqui
Eminent Pakistani Banker & Economist
In this article the author has quoted one Quranic ayah to define the Allah’s saying about “interest”.
The author has also defines the mode of financing Islamic Banking. The author then developed a
model for Islamic banking, about how the system of Islamic Banks would be.
It is now time that Islamic banks and financial institutions resolve to gradually enhance their share of
financing on PLS basis and reduce the share of financing on the basis of Murabaha, Bai Mu'ajjal and
the like modes of financing. If Islamic banks succeed in demonstrating a practical example of
socioeconomic justice by gradually enhancing their financing on PLS basis and also achieve further

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satisfactory operational results, there is no reason why more cooperation would not be extended to
them by the European, American and other interest based banks.

Article No. 4 Summary

Islamic Banking and Finance: On Its Way to Globalization
By M. Mansoor Khan, M. Ishaq Bhatti, (2008)
The main objective of this paper is to highlight the unprecedented growth of Islamic banking and
finance in the contemporary finance world. It captures the advancements of Islamic banking and
finance industry across the tools, systems, sectors, markets and over 75 countries from Africa, Asia,
Europe and North America.

The findings of the paper hold that Islamic banking and finance industry has been making breakthrough
improvements to become a truly viable and competitive alternative to conventional systems at the
global level. Islamic banking and finance institutions have acquired booming grounds in the Middle
East, South East and South East Asia. These growing Islamic hubs have been acting as a launching
pad to promote Islamic banking in Western business and financial markets. There are some core factors
contributing to the recent success of Islamic banking and finance, such as spiraling oil prices
worldwide, prolonged boom in the Middle Eastern economies, product innovation and sophistication,
increasingly receptive attitude of conventional regulators and information technology advancements
that have been acting as a catalyst for the Islamic banking and finance industry to go global. Given all
growth patterns, Islamic banking may be able to win over the majority of customers from the Muslim
world that constitutes almost 24 per cent of the world's population (over 1.3 billion), and other ethical
groups across the globe in times ahead.

Article No. 5 Summary

Liquidity Risk Management: A comparative study between Conventional and
Islamic Banks of Pakistan
By Muhammad Farhan Akhtar, Khizer Ali, Shama Sadaqat (2011)
This paper investigates the significance of Size of the firm, Networking Capital, Return on Equity, Capital
Adequacy and Return on Assets (ROA), with liquidity Risk Management in conventional and Islamic banks of
Pakistan. The study is based on secondary data, that covers a period of four years, i.e. 2006-2009.

The study found positive but insignificant relationship of size of the bank and net-working capital to net assets
with liquidity risk in both models. In addition Capital adequacy ratio in conventional banks and return on assets
in Islamic banks is found to be positive and significant at 10% significance level.

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Article No. 6 Summary
An Empirical Investigation of Islamic Banking in Pakistan Based On Perception
of Service Quality.
By Ashfaq Ahmad, Kashif-ur-Rehman, Iqbal Saif and Nadeem Safwan (2010)
This study examines the perception of bank customers regarding service quality of the Islamic banks
as well as conventional banks in Pakistan. This study is important due to an emerging trend of Islamic
banking practices in Pakistan besides conventional banking to replace Riba based products with the
sharia'h compliance products.
The results indicate that there is significant difference in perception of service quality among customers
of Islamic banks on the basis of gender but there is no significant difference in service quality
perception of male and female customers of conventional banks. The study has a number of
implications for bankers, policy makers and academicians. It provides a guideline to Islamic banks for
provision of marketable products to meet expectations of male and female customers according to their
specific requirements.

Article No. 7 Summary

Introducing Islamic Banks into Conventional Banking Systems
Prepared by Juan Sole (2007)
This paper attempts to shed some light in this area by describing the main phases in the process, and
by flagging some of the main challenges that countries will face as Islamic banking develops alongside
conventional institutions.
The author has found that the Islamic banking system is growing rapidly all over the world and all the
Islamic countries with the help of IMF are creating the multilateral institutions in order to support the
governments to create the Islamic banking system in their respective countries. In addition, the
authorities should engage in dialogue with the local stakeholders of this industry, in order to promote
an open and fluid exchange of information and ideas.

Article No. 8 Summary

Customer’s Attitude towards Islamic Banking in Pakistan.
By Kun-ho Lee & Shakir Ullah (2011)
The purpose of this paper is to examine the different motivational factors that lead to customers' Islamic
bank selection decision in Pakistan. In particular, it aims to look into the importance of Shari'a
compliance for Islamic banks' customers and thereby the potential risk of deposits withdrawal in case
of violations of Shari'a principles.
The findings reveal that Islamic banks' customers highly value Shari'a compliance in their banks and
that non‐compliance with Shari'a principles leads to disgruntled customers. An interesting

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pronouncement is that if an Islamic bank is involved in repeated violations of Shari'a, the customers
are inclined to switch their banks. Nonetheless, the findings reveal that Shari'a compliance is not the
only satisfaction yardstick for Islamic banks' customers; they also expect their banks to be convenient,
technologically advanced and provide security of their capital.

Article No. 8 Summary

Barriers to Adoption of Islamic Banking in Pakistan
By Ifran Butt, Nausherwan Saleem, Hassan Ahmed, Muzammil Altaf, Khawaja Jaffer & Jawed
Mehmood (2011)
The purpose of this paper is to report the findings of a pilot study conducted in Pakistan, about the
barriers perceived by users and non‐users of Islamic banking when selecting Islamic banks.

A narrow branch network, inconvenient branch locations and perception that “Islamic banks do not
completely follow Islamic principles” acted as barriers for non‐users when selecting Islamic banks.
Further, “a religious ruling against Islamic banks” was not considered an important barrier when
selecting Islamic banks.

Article No. 9 Summary

Islamic banking: Interest-free or interest-based?
By Beng Soon Chong, Ming-Hua Liu (2008)
A unique feature of Islamic banking, in theory, is its profit-and-loss sharing (PLS) paradigm. In
practice, however, we find that Islamic banking is not very different from conventional banking. Our
study on Malaysia shows that only a negligible portion of Islamic bank financing is strictly PLS based
and that Islamic deposits are not interest-free, but are closely pegged to conventional deposits. Our
findings suggest that the rapid growth in Islamic banking is largely driven by the Islamic resurgence
worldwide rather than by the advantages of the PLS paradigm and that Islamic banks should be subject
to regulations similar to those of their western counterparts.
Finally, our study suggests that the adoption of the PLS paradigm is constrained by competition as
well as by best practices from conventional banking. Religion notwithstanding, individuals can choose
to bank with an Islamic bank and/or a conventional bank. Thus, in terms of best practices, Islamic
banking practices often cannot deviate substantially from those of conventional banking because of
competition. In particular, our study shows that the returns on the Islamic deposit accounts are
effectively pegged to the returns on conventional-banking deposits because of competitive reasons.

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Article No. 10 Summary
Islamic Banking: Present and Future Challenges
By Noor Ahmed Memon (2007)
The paper emphasizes the role of Islamic banks as financial intermediaries and the importance of
financial intermediation for society. It argues that Islamic Banks entering directly into trade, industry
and agriculture etc is not beneficial because it means leaving the role of financial intermediation for
others. The basic principle of Islamic banking is the prohibition of Riba or interest, which has seldom
been recognized as applicable beyond the Islamic world, but many of its guiding principles have,
consciously or unconsciously, been accepted. The majority of these principles are based on simple
morality and common sense, which formed the basis of many religions, including Islam.

The Islamic financial system employs the concept of participating in Halal business opportunities,
utilizing the funds at risk on a profit-and-loss-sharing basis. This does not mean that investments with
financial institutions are necessarily speculative. This is excluded by careful investment policy
diversification of risk and prudent management by Islamic Financial Institutions. The investment in
Islamic Financial Institutions provides potential opportunity for profit in proportion to the risk assumed
to satisfy the different demands of participants in the contemporary environment and within the
guidelines of the Shariah.

Article No. 11 Summary

By Muhammad Akram, Mamoona Rafique, Hassan Mobin Alam (2011)
This study examines the growth and development phases as well as prospects of Islamic banking in
Pakistan. The role of Islamic banking is explained with special regards to corporate social
responsibility (CSR) as now days this concept is growing vastly. Awareness in public also has been
growing and people are moving towards Islamic banking system.

In the last eight years, Islamic banking paved with the rapid market share of banking services.
Moreover the efforts made by the central bank in Pakistan (SBP) are also remarkable in growth of
Islamic banking. By seeing the present growth of Islamic banking, it is anticipated that in near future,
Islamic banking with get major share in banking industry in Pakistan.

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