Modern plastic money (the credit card) and sharia alternative (special reference to Amana Bank, Sri Lanka)

Abstract

The plastic money (Credit Card) is the one of the fastest growing mode of payment in today’s society, in Sri Lanka. It has achieved a significant growth within the short period of time as an alternative to paper money. The Banking Act No.30 of 1988, Sri Lanka was amended in March 2005 in order to introduce Islamic banking and finance in the country. It resulted in the year 2014, with the operation of a fully fledge Sharia complaint bank along with other twenty four licensed commercial banks in the island. Further, there are number of conventional banks and financing companies are offering Sharia complaint products. Conventional banks in Sri Lanka are undergoing an essential transformation in order to retain their existing customer base as well as to attract new clients with innovative products and competitive prices. Amana Bank operating on Sharia based has to compete with these banks in order to attract new customers as well as reform the bank as core bank for the existing customers. As a result of these it has to offer alternative products to conventional banks which will make the bank to sustain in the competitive market. It faces similar dilemmas and risks to their conventional counterparts.This study is conducted to analyze an alternative Sharia complaint credit card with the features and factors of the conventional credit card with special reference to the faith based segment in Sri Lanka. The result could be used as guidance for other Islamic Bankers in promoting these types of credit cards for their customers.