Challenges of Islamic Banking practices in Sri Lanka (with special reference to Amana Bank Limited)

Abstract

The rapid development of Islamic banking is viable worldwide. However, the Islamic banking industry has to face a number of challenges in its practices. Thus, Islamic banking Institutions of Sri Lanka also faces remarkable challenges while growing rapid in the nation. This is because of lack of awareness of Islamic finance techniques, Islamic finance operations and human resources. This Study was examined the challenges of Islamic banking practices in Sri Lanka. The purpose of this study is to investigate major challenges of Islamic banking in Sri Lanka. Therefore, this Study examines the relationship of major challenges on practices of Islamic banking. Quantitative method was carried out which include questionnaire and secondary data materials. The population for this study considers the bankers and Shari’ah supervisory board members of all the branches of Amana Bank Limited. A simple random sampling technique was used to select the respondents surveyed for this study. For data analysis, descriptive statistical techniques were used. For hypothesis testing, spearman correlation and multiple linear regressions analysis were used. Findings reveal that there is a significant negative relationship between major challenges and practices of Islamic banking from the sample point of view. Furthermore, it reveals that bankers at Amana Bank Limited have perceptions that the major challenges are negative impacted on practices of Amana Bank Limited.