Comparative Analysis of Islamic and Convectional Banking in Pakistan.
Keywords:
Banking Preferences, ARCH Model, Banking Sector GrowthAbstract
To learn more about Pakistani consumers' banking preferences, a thorough investigation was conducted between January 1, 2010, and October 26, 2023. Specifically, it compares the performance of Islamic banks (Meezan Bank, Dubai Islamic Bank, and Bank Islamic) and conventional banks (Allied Bank, Askari Bank, Summit Bank, and MCB Bank). Using the ARCH model to evaluate efficiency, the research finds a significant shift in favor of Islamic banking, which can be attributed to the increasing recognition of its ethical and interest-free services. Despite this trend, both Islamic and conventional banks encounter difficulties, highlighting the necessity of an in-depth comprehension of consumer preferences and strategic policy enhancements. The study emphasizes the significance of government, bank, and research collaborations to refine regulations and ensure sustained growth, effectively meeting the diverse financial needs of customers in Pakistan.