A study of customers` perception on the code of ethics of islamic banks in Malaysia

Abstract

In the present growing world of banking business, code of ethics has become one of the main tools for its prospects to govern the business and enhance the external image of the bank towards the customers. Islamic Banking is on a phase of rapid growth and their Islamic ethical business character is a core aspect for their existence which focuses on the ethical dimensions to address the social problems like poverty and inequality, which conventional banking system has failed to offer. This research aims to study the published code of ethics from Islamic Financial Services Board (IFSB) with those of existing ethical codes in Islamic financial institutions. The study also examines the extent of which these principles are been adopted by the employees of IB in Malaysia through the perception of their customers. A Qualitative research methodological approach is performed by studying and analyzing IFSB code of ethics. As a part of Quantitative approach questionnaires were prepared and distributed among IB customers in Malaysia. The research findings shows that many IB practitioners believe that IBs are lacking ethical codes in their system, however based on the customers’ perspective, the study found positive results in favor of IB employees that they practice and characterize themselves with morality and posses’ high ethical standards when dealing with their customers. This minor research is expected to help the existing IBs to inspect and adopt the true value of Islamic code of ethics in their system.