CHAPTER 01 INTRODUCTION
4.4 RATE OF RETURN
When we analyse the responses for the questions aim to test the Rate of return on Islamic banking products variable we found following outcomes
Question: I'm getting Higher rate of return on savings
Frequency Percent
Strongly Disagree 112 50
Disagree 71 31.8
Moderate 31 13.6
Agree 10 4.5
Total 224 100.0
Based on above table, 82% of respondents were not agree that they were not paid an attractive rate of return on their investments. Only 5% of the respondents were agree on were paid an attractive rate of return on their investments in IB Products.
Question: I'm getting Islamic facilities on lower rate of return
Frequency Percent
Strongly Disagree 122 54.5
Disagree 41 18.2
Moderate 41 18.2
Agree 10 4.5
Strongly Agree 10 4.5
Total 224 100.0
Based on above table, 73% of respondents were not agree that they were getting Islamic financing facilities on lower rate of return. Only 2% of the respondents were agree on were getting Islamic financing facilities on lower rate of return.
Question: I'm satisfied with the rate of return about Islamic banking products
Frequency Percent
Strongly Disagree 82 36.4
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Disagree 82 36.4
Moderate 40 18.2
Agree 20 9.1
Total 224 100.0
Based on above table, 73% of respondents were not satisfied with the rate on return on Islamic banking products of the Amana bank. Only 9% of the respondents were satisfied with the rate on return on Islamic banking products of the Amana bank
Based on the above data we can decide that the rate of return on the Islamic banking products of the Amana bank relatively not attractive to the respondents. This argument supports the Hypothesis 2 of this study.
Addition to above primary data collected researcher wish to present secondary data collected via internet sources in order to analyze whether rate of return of Islamic banking products are attractive than other conventional banks, interest rates data of three leading conventional bank of Sri Lanka, compared with Amana bank‘s rate of return. Following table will show the rates of return of Amana and other three banks namely Commercial bank of Ceylon, Sampath Bank and Hatton National Bank (HNB).
Table 4.2:Rate of return figured of bank as at 31/10/14 -A.
Investment (Deposit)Prodcuts Amana Commercial Sampath HNB
Savings Account 2.91% p.a 4.07% p.a 4.00% p.a 3.56% p.a
Children's Savings Account 5.82% p.a 6.50% p.a 6.50% p.a 7.00% p.a Ladies Savings Account 3.40% p.a 5.12% p.a 5.00% p.a 5.13% p.a Senior Citizen Savings Account 3.88% p.a 6.00% p.a 5.50% p.a 6.30% p.a
Salary Savings – Personal 2.91% p.a 5.11% p.a NA NA
Salary Savings - Corporate/Plus 3.40% p.a 5.74% p.a NA NA Senior Citizens Term Investment (12
months - Monthly) 7.28% p.a 6.00% p.a 5.50% p.a 6.50% p.a
Savings Plan 5.01% p.a 5.12% p.a 5.00% p.a 5.13% p.a
Above table depicts that Amana Bank pay considerably less rates of return compare to conventional bank for savings products. Except to senior citizens term investment all other accounts were paid far lesser rate than its conventional counterparts. In this case of ladies saving accounts Amana bank pays 3.4% per annum whereas Commercial bank pays higher rate of 5.12% per annum.
Table 4.3:Rate of return figures of bank as at 31/10/14-B.
Facility Prodcuts/Lending rates Amana Commercial Sampath HNB Vehicle Ijarah/Leasing 9.51% p.a 9.50% p.a 10.50% p.a 10.25% p.a Machinery Ijarah/Machniery loan 12.29% p.a 11.00% p.a 12.00% p.a 10.75% p.a
Murabaha/Term loan 21.00% p.a 12.00% p.a 14.00% p.a 12.75% p.a
Home Musharakah/Home loan 16.50% p.a 9.50% p.a 10.50% p.a 9.25% p.a Easy Payment Plan/Life Style loans 16.00% p.a 12.00% p.a 11.00% p.a 12.50% p.a Table 4.3 depicts that when Amana bank providing financial instruments its customers were charged more than its conventional counterparts. The Murabaha mark up for cost plus trading products are 21% per annum where similar financing services available at conventional banks at as lower as lower 12% per annum. Similarly for Home musharakah facility, Amana bank‘s rate of return is 16.50 per annum whereas other banks provide at as lower as 9.25% per annum.
60 4.5 AVAILBILITY OF BRANCHES
According to literature reviewed, Availability of branches and ATM‘s play a vital role in bank selecting criteria. When we analyse the responses for the questions aim to test the availability of branches variable we found following outcomes
Question : I'm satisfied with Available no of Branches of Amana
bank
Frequency Percent
Stongly
Disagree 102 45.5
Disagree 82 36.4
Moderate 30 13.6
Agree 10 4.5
Total 224 100.0
Based on above table, 82% of respondents were not satisfied with the branch availability of the Amana bank. Only 19% of the respondents were satisfied branch availability of the Amana bank.
I'm satisfied with facilities availble at branches of Amana bank
Freq u-
ency Percent Stongly Disagree 92 40.9
Disagree 81 36.4
Moderate 51 22.7
Total 224 100.0
Based on above table, 77% of respondents were not satisfied with the facilities available at branches of the Amana bank. 23% of respondents are silent with the facilities available at branches of the Amana bank.
I'm satisfied with Available No.
ATM's of Amana bank
Frequency Percent
Stongly
Disagree 122 54.5
Disagree 82 36.4
Moderate 10 4.5
Agree 10 4.5
Total 224 100.0
Based on above table, 91% of respondents were not satisfied with the ATM‘s availability of the Amana bank. Only 9% of the respondents were satisfied ATM‘s availability of the Amana bank. This argument supports the Hypothesis 3 of this study.
Addition to above primary collected data following table will compare the number of branches availability of Amana bank comparing with conventional banks.
Table 4.4:Availability of branches
Amana Commercial Sampath HNB
No of Branches 26 238 219 250
No of ATM's 20 600 315 431
Table 4.4 depicts that the Number of branches operated by Amana bank is much less than the other conventional banks. Amana Bank has 26 branches and located in predominantly in major cities.
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Whereas conventional banks operates in major cities as well and rural in roots.This figures suggest that Amana bank is not geographically widespread in the country where most people of the country lives in rural areas.
Question Agree
I consider, based on my awareness when selecting IB Products 91%
I consider, based on rate of return when selecting IB Products 82%
I consider, availability branches of bank when selecting IB
Products 57%
Based on responses 91% of the respondents select Islamic banking products based on its Awareness ,82% on attractiveness of rate of return and while 57% on branches and ATM‘s availability