Islamic banking in Singapore.

Abstract

Multiple financial crisis and changes has enlightened consumers to be more aware of possible pitfalls. In addition, it has led to the search of alternative banking systems that are more ethical and safer, which eventually catalysed the growth of the Islamic Banking Industry internationally.

We have also realised that there is potential of this industry in Singapore, but has been overshadowed by the conventional banking methods currently. Therefore we decided to focus on Islamic Banking in Singapore, specially the awareness and perception of Islamic Banking to the people here, the comparison of the performance of conventional and Islamic banks and the bank selection criteria of consumers in Singapore. Finally, we also discussed about the possibility of an internationally unified Shariah Board.

In our study through surveys, we found out that there is low awareness of Islamic Banking due to lack public education, and they perceive that an Islamic Bank should be promoting Islamic values and way of life towards society. In addition, convenience is viewed as the most important bank selection criteria in Singapore.

Next, upon interviewing several professionals in this industry, we found out that the possibility of a unified international Shariah Board is relatively low, but a Regional Shariah Board in ASEAN is relatively feasible. Finally, using the Data Envelopment Analysis, the performance of Islamic Bank of Asia is comparable if not better than conventional banks in Singapore.