09vwcma039-irfan ahamed f

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DISSERTATION REPORT

A STUDY ON BUILDING A SUSTAINABLE BUSINESS MODEL FOR ISLAMICFINANCE- AN INDIAN PERSPECTIVE

Dissertation submitted in partial fulfillment of the requirement for the Award of the Degree of

MASTER OF BUSINESS ADMINISTRATION

Of

BANGALORE UNIVERSITY

by

IRFAN AHAMED F

Reg. No. 09VWCMA039

Under the guidance of

Prof. Smitha.V. Shenoy

Faculty Guide

Alliance Business Academy

ALLIANCE BUSINESS ACADEMY

BANGALORE -560 076

Batch: 2009-2011


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Literature Review

Dr. Aseem Rastogi (2011) With Kerala HC dismissing the petitionagainst Islamic Banking in India recently, Islamic banking is finallycoming to India, people need to be educated regarding the concept.With the western world increasingly isolating the Middle East after9/11 and successive terrorist strikes, the Arabs arent interested to

invest anywhere close to such places. Instead they are planning to lookat China and India as these are the fastest growing countries on theplanet,

IMF, Khan M.S (2008) Globally, Islamic finance is estimated to beworth $300 billion, growing annually at 20%. With this growth, theneed for Shariah compliant has also increased. India with a 13%

Muslim population , the highest in a non-Muslim Islamic country,should have been in the forefront of Islamic banking initiatives. It willhugely benefit the Indian economy by attracting investments from thecash rich Middle eastern countries on the lookout for new investmentdestinations.


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Research Methodology Title of Research:

A Study on building a Sustainable business model for Islamic Finance

- An Indian Perspective.

Type of Research:The type of research is descriptive research and exploratory research.

Need for the Study:

When the world is moving towards Islamic banking at its own pace andhas become more curious than ever, after the collapse of conventional

banking techniques, where does India stand in this race for setting up

Islamic Institutions?. India has a Muslim Population of 160 million, which

definitely is a potential market for Islamic banking if Implemented in

India.


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Research Methodology(Cont)

Objectives of the Research:

To find the awareness level of Islamic banking among the

people in India. To understand the acceptance of Islamic banking in India.

To study the different instruments, institutions, andcontracts involved in Islamic banking and finance.

To understand how it is different from the conventional

banking and to know the risk and return involved in it. To develop a sustainable business model for Islamic

Finance.


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Sampling Method:

The judgmental method of non-probability sampling was adopted.

Sampling Unit:The sampling unit were bankers, retail investors and educators.

Sampling Size:

The sample size considered for the study was 10 bankers, 60 Investors and10 educators.


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Scope of the Research:

The project is done to look at the various

perspectives which are carried about Islamic bankingin India and to arrive at a common conclusion. The

Feasibility analysis of Islamic banking and its

products/contracts in India.

StatisticalT

ools Used:Various statistical tools like 2-way Annova,

Co-relation test and Chi-Square test were used.


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Data Collection

Primary Data:

The information required was collected throughquestionnaire to get an insight into Islamic banking.

Secondary Data:

It was collected from journals, articles and Internet.The various sources includes as follows

Newspaper articles: Business Standard, Economic Times. Journals: International Journal of Islamic financial services

Vol.5 No4

Websites: Indian Muslims.in, Newhorizon-islamicbanking.com


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Limitations of the Research

The main limitation of the study was that Islamic

banking is only an emerging concept, hence the sample

may not truly represent the population.

Further due to limited time constraint the sample size

was 80 only, but efforts were taken that it represents the

population.

The coverage of the study was limited to Bangalore

only and the results may not truly represent the whole

of the country.


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Major Findings

The analysis revealed that 58.75% of the respondents were awareof Islamic Banking.

It was found from the study that 56.25% of the respondents wereready to Invest in Islamic bank and only 25% of them were notwilling to invest.

The prejudices about Islamic banking and financial system stillremained as there was not yet report on economic viability ofIslamic banking and its impact on inclusive growth.

Islamic banking has one of the objectives of equal distribution ofincome, which in other words means complete eradication of

poverty. It can be achieved with successful implementation ofIslamic banking in India,

There was also a fear that Muslims may dominate the Islamicbanking industry in India.


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Major Suggestions

Since the awareness about Islamic banking is not good enough thereshould be adequate measures taken in order to ensure that all availableinformation in relation to the banking operations, products offered etc.are in reach of the common man. This could be done as a promotionalactivity before launching the bank.

The name of Islamic banking should be changed to Interest freebanking, so as to negate the negative impact on it due to its name.

They should set up training institutions on Islamic banking and shouldimpart training to borrowers and public to increase their clientele.

The research states that people are interested and ready to acceptIslamic banking products and are willing to invest in them but thereare a lot of misconceptions regarding Islamic banking and financialsystem which would revoke their decision. Hence creating a positiveattitude towards Islamic Banking is very much necessary.


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My Learning

The learning starts with knowing about the Islamicbanking and financial system.

I also learned about the global Islamic banking

operations.

I also learned about the problems Islamic bankingfacing in India and also the Indian banking Industryand it current scenario.

It also helped me learn to plan the time effectively,distributing it effectively among the various tasks thatwas required to accomplish this research.


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THANK YOU

09vwcma039-irfan ahamed f

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