Perception of bank customers on the compliance of Islamic banking services with Islamic law in Tanzania

In general, the number of studies on customer perception and Shariah compliance is quite large in the Islamic Banking and Finance literature, but more research is needed on the weight that customers place on Sharia Compliance on other factors used in choosing a Bank. This study aims to analyse how Islamic Bank customers perceive their banks' compliance with Sharia Law and in what order this pillar (Sharia compliance) stands in attracting customers to Islamic Banks compared to the other three factors/criteria in bank selection. The criteria used for this purpose are the client's awareness of Islamic/Sharia banking practices; Islamic Bank consists of service quality and customer satisfaction and other criteria/factors that customers can use when choosing an Islamic bank, especially in the United Republic of Tanzania. Using a cross-sectional quantitative method, data were collected from a population of 305 Islamic Bank customers, randomly selected and analysed with descriptive statistics, using a closed-ended questionnaire, from five (5) banks offering Islamic Bank products. The results show that Islamic Bank customers in Tanzania perceive their banks in Tanzania as Shariah-compliant, and Sharia Compliance emerges as the top criterion for Islamic Banks' client selection. Based on the results, we conclude that Islamic bank customers in Tanzania have a positive perception of Banks' sharia compliance, which is the criteria that mostly attract customers to Islamic banks. It can be recommended from the results that in Tanzania, customers' selection of Islamic banks is basically for the purpose of Shariah banking. All other selection criteria come next. In that respect, Islamic banks need to increase their commitment to documentation and openness of transactions in order to maintain awareness and trust and observe the quality of the services they offer.