The Perception Paradox: Conventional Private Bankers’ Understanding and Acceptance of Islamic Banking in Bangladesh

Abstract

This research paper examines the perception paradox undergone by the conventional private commercial bankers in Bangladesh over Islamic banking. Although Islamic banking has experienced rapid expansion in Islamic countries, among which is Bangladesh, the adoption by conventional banking experts is skewed. The study examines the level of understanding, acceptance, benefits, and challenges of Islamic banking within the context of the conventional bankers’ perspective. Using a case study approach based on theoretical underpinnings, including Diffusion of Innovation Theory, and Institutional Theory, the paper seeks to bring out the cognitive and institutional barriers that impact perception. Interviews with the senior bankers in leading private banks shed light on the attitude, knowledge gap, and the reluctance or support of Islamic banking. The report reveals a significant gap between theoretical acceptance and practical scepticism, which calls for an integrated training, regulatory congruity and strategic synergy between banking systems.