The impact of Islamic banks’ non-Shariah-compliant income on customers’ trust and commitment: case of Islamic banks in Pakistan

Purpose: Islamic banking is a financial institution that is concerned with the regulation of the Shariah guidelines. Several full-fledged and Windows-based Islamic banks in Pakistan have reported non-Shariah-compliant income (NSCI) due to various operational investment activities. Hence, this issue has attracted this study to examine the impact of NSCI, especially from the perspective of Islamic bank (IB) customers’ trust and commitment. Design/methodology/approach: This study used trust-commitment theory as the underlying theory to examine customers’ trust and commitment. A total of 341 questionnaires have been distributed, and the data is analysed using the structural equation modelling (SEM) method. Findings: The results show the commitment of IB customers has a significant relationship with the benevolence, trust and shared values of the top management of IBs. Meanwhile, the other two constructs, the ability and integrity of the top management, are found to be insignificant. Research limitations/implications: The gender diversity among banks’ customers in Pakistan is the main limitation in this study. There were difficulties in selecting a more representative sample due to gender domination issues in the country. Thus the data revealed that 62.8% were male respondents, which confirms the prior research on the gender disparity. Originality/value: This study provides interesting insights into the context of Pakistan’s Islamic banking sector as it examines top management’s ability, integrity, benevolence and shared values to affect trust and commitment, and the role of trust as a mediator.