A study on the determinants of selecting Islamic bank in Kota Kinabalu, Sabah / Brenda Stifani Harry

In contrast to conventional banking, Islamic banking provides various products and services that must be compliance to the Shariah Laws. Every each of the Islamic banking transactions as well as the economic activities must be based on contracts that are stated under the Shariah Law. Shariah is an Islamic word which means the every basis that are used in the Islamic banking transactions and activities must meets the religious requirements that are stated under the law and must be obeyed by all the Muslims. Islamic banking activities prohibit riba and all the activities that are related to speculating, gambling and everything unethical and illegal in Islam (Amin et al., 2011). Riba or in another word, usury is an Islamic banking concept where it refers to the interest that is charged in any transactions that has been made between two or more parties involved. Under the Shariah laws, it stated that there are many kinds of products that are offered at the Islamic bank such as savings (Al-Wadiah), joint venture (Al-Musyarakah), profit sharing (Al-Mudharabah), deferred payment sale (Al-Bai Bithaman Ajil), cost plus sharing (Murabahah), leasing (Al-Ijarah), guarantee (Al-Kafalah) and Benevolent loan (Qard Hassan) as well as fee (Al-Ujr) (Selamat, 2012). There are similar values in between of Islamic finance and Halal. Disconnection between these two had been seen in Malaysia as the penetration of Islamic financing among the Halal industries is not high.