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Kamal Naser: Lecturer in Accounting and Finance, Cardiff Business School, Cardiff University, Cardiff, Wales, UK
Ahmad Jamal: Lecturer in Marketing, Cardiff Business School, Cardiff University, Cardiff, Wales, UK
Khalid Al-Khatib: PhD candidate, Cardiff Business School, Cardiff University, Cardiff, Wales, UK
ACKNOWLEDGMENT: The authors are grateful to two anonymous referees and editor for their helpful comments and suggestions on earlier drafts of the paper.
Introduction
The Islamic banking system has gained momentum worldwide. There are now 180 Islamic banks and financial institutions operating in Asia, Africa, Europe and the USA with more than 8,000 branches with an estimated $170 billion[1]. The popularity of the Islamic banking system is not limited to the Islamic banks only. Increasingly large international conventional banks are showing interest in the Islamic banking system as well. For instance, Citibank has established branches in countries like Bahrain and Sudan to operate in accordance with Islamic Sharia'h principles.
The consequence of this is that Islamic banks operating in Islamic countries are faced with strong competition not only from Islamic banks but also from non-Islamic rivals (Naser and Moutinho, 1997). Though the Islamic banking system is different from the conventional banking system, there are some similarities between the two. For instance, an Islamic bank conducts its activities in accordance with the Islamic Sharia'h principles that strictly prohibit any payment or receipt of interest. However, the Islamic bank can also offer products and services which are similar to those offered by a conventional bank[2].
When competition intensifies and when banks start to offer more or less similar products and services, it is the customer's satisfaction that can influence the performance of an Islamic bank and determines its competitiveness and success. Hence it is of paramount importance to assess the degree of customer satisfaction towards Islamic banks operating in Islamic countries. In this context, a number of questions can be raised. For example, in a country where the majority of the population are Muslims and where both Islamic as well as conventional banks operate, "what are the main factors that motivate customers to deal with either an Islamic bank or a conventional bank or both?"; and "to what extent customers are satisfied with their banks?".
In this study, an attempt is made is to assess the degree...