SWITCHING INTENTION OF MUSLIM DEPOSITORS IN ISLAMIC DEPOSIT ACCOUNT

Islamic finance has achieved remarkable growth all over the world. Without exception, Malaysia has also been enjoying rapid and robust development in Islamic finance. Despite the encouraging growth and the great acceptance of Islamic financial products, one controversy may reverse the perception about Islamic finance. The issue is that recently several Islamic banks introduced the concept of bai‘ al-‘īnah to be applied on deposit account which allows them to promise return to depositors. This strategy may encourage more Muslims to keep their money in Islamic banks. The use of this contract is in principle permissible in Malaysia, albeit admitted as controversial. Therefore, this study attempts to examine the switching intention of Muslim depositors if return on Islamic deposit account is not promised or guaranteed by Islamic banks. The Theory of Reasoned Action, in which intention could be the best determinant of individual behavior, is used as the basis of the study with a 375 participant sample. The findings showed that Muslim depositors do not really care about a promised return for deposit account practiced by several Islamic banks. For that reason, Islamic banks should not worry about introducing a promised-return based product for deposit accounts.