Article-5 Adoption of Islamic Banking in a Mediated Mechanism: Bangladesh Perspective

Abstract

Although Islamic banking is widely adopted in Bangladesh, the Bangladeshi banking sector is still dominated by conventional banks. While religious sentiment helped Islamic banks grow in Bangladesh, lack of awareness and negative perceptions about Islamic banking may diminish that growth. This study aims to investigate how the willingness to adopt Islamic banking in Bangladesh is affected by the awareness of Islamic Banking and religiosity and how these relationships are mediated by the perception of Islamic Banking. Data from 302 respondents were collected using convenience sampling with a closed-ended self-administered questionnaire, while PLS-SEM was used to analyze the data. The study contributes to the existing literature by confirming the relationship between the aforementioned variables in the context of Bangladesh. As the study provides practical insights into the impact of perception, we recommend awareness and marketing campaigns to deal with potential negative perceptions from diminishing the willingness to adopt Islamic banking.