A Constructive Analysis of Bank Customers and Professional Bankers' Perspectives on Islamic and Conventional Banking in Bangladesh.

This study examines the similarities and differences between Islamic and conventional banking through theoretical analysis and surveys of bankers and customers. It aims to clarify common misconceptions about Islamic banking, which often arise from misinformation in civil society. By raising awareness of the unique advantages of Islamic banking, its adoption could increase in many Muslim countries, as there is a strong desire to shift from the interest-based financial system to a robust interest-free framework. Surveys reveal that confusion among bankers and customers regarding Islamic practices is largely due to insufficient knowledge and a focus on short-term trade financing. With 80 to 90 percent of investments geared towards short-term trade, the risk of instability rises. Many borrowers prefer short-term loans over profit-loss sharing, weakening bank portfolios and leading to lower returns compared to conventional banks. Although Islamic banks have mobilized deposits, they have struggled to fund socially beneficial projects or job creation, particularly in rural areas. Addressing misconceptions through increased awareness, research, and training on compliant Islamic banking products is essential.