ISLAMIC BANKING VS CONVENTIONAL BANKING, DURING THE GLOBAL FINANCIAL CRISIS: MALAYSIA AS A CASE

Abstract

The purpose of this paper is to measure and discuss the impact and performance of conventional and Islamic Banking in Malaysia during the global financial crisis. Performance is measured in terms of profitability, operational efficiency, liquidity and business growth. The period of study is during the financial crisis 1997 (Asian Financial Crisis) and 2007 (Global Financial Crisis). Several published papers and researches have been used in this study. The comparison is made between the performances of Conventional Banking with Islamic Banking in Malaysia. The findings show that Islamic Banking had performed better than Conventional Banking, Therefore, it can be concluded that the Islamic Banking system is able to sustain, survive and compete with the conventional banking system especially during the Global Financial crisis.