CHAPTER 1
INTRODUCTION

1.1 The Introductory Paragraph
Islamic banking refers to a system of banking that complies with Islamic law also known as Shariah law. The underlying principles that govern Islamic banking are mutual risk and profit sharing between parties, the assurance of fairness for all and that transaction are based on an underlying business activity or asset. The Islamic banking system has gained momentum worldwide. There are now 16 Islamic banks and financial institution operating in Malaysia. The popularity of the Islamic banking system is not limited to the Islamic bank only. The conventional system also interested in Islamic banking system For instance, CIMB has established CIMB Islamic bank that operates in accordance with Islamic Shari’ah principles.
Islamic banks faced with strong competition not only from Islamic bank but also from conventional banks. The Islamic banking system is different from the conventional banking system but have some similarities between the two. For example, an Islamic bank conduct s its activities in accordance with the Islamic Shari’ah principle that strictly prohibit any payment or receipt of interest. However, the Islamic bank can offer product and service which are similarity by conventional bank.
When Islamic banks or conventional banks offered any new product or service, the successful depends on the customer satisfaction level towards that product or service. In this competition, they must have to give extremely high consideration to their customers. They must have to produce such level of services and products to its customers that they could attract them and can satisfy them and make them loyal to their product and services.
Customer satisfaction is a key factor in finding out why customers leave or stay with a bank. Generally, any bank needs to know how to keep their customers, even if they seem to be