| The banking industry, over several decades, has been instrumental in facilitating the economic growth of Malaysia. Islamic banking was launched in Malaysia in 1983. The 20 percent market share achieved in Islamic assets, deposits, and financing, over a period of 28 years reflects relatively a slow growth in comparison with conventional banking. As the Malaysian government aspires to have a resilient and dynamic Islamic banking and financial system in place, empirical studies are essential to provide deep understanding of Malaysian banking customers' adoption behavior towards Islamic banking (FSMP, 2001). The main aim of this study was to examine, the nature of customer adoption of Islamic retail banking products and services, particularly Islamic deposit and financing schemes, by determining the crucial factors that affect the adoption of Islamic Retail Banking (IRB) in Malaysia. In addition, this study has included the moderating effect of religion and region. Unlike previous Islamic banking studies, which were restricted in scope and representation, due to limited sample size, and were focused only on few locations in urban regions of Malaysia, this study therefore, extends existing literature by expanding the scope of the study to rural regions. A comparative analysis between urban and rural banking customers was conducted to gain deeper insights into customers' awareness and perceptions on, and preferences for IRB products and services. Customer adoption in this study is investigated within the context of current usage of IRB and intention to use IRB. |
