INTRODUCTION
Islamic banking deposits present an investment alternative grounded in sharia principles, appealing to individuals seeking to circumvent usury (Najmi et al., 2024). Nevertheless, despite its benefits, various challenges persist in practice. Below are some of the primary issues frequently encountered in Islamic banking deposits:
Product Constraints
Islamic banking frequently encounters constraints in product diversity when compared to conventional banking. This limitation may diminish its attractiveness to customers in search of a broader range of flexible investment opportunities (Soleh, 2023).
Insufficient Public Comprehension
Many individuals still do not fully grasp the concepts and principles of Islamic banking, including the mechanisms of Islamic deposits. A deficiency in education and clear information may impede the growth and adoption of these services.
Profit Distribution Risk
One of the primary distinctions between sharia and conventional deposits lies in the method of profit sharing (Rofika et al., 2023). In sharia deposits, profits are distributed according to a predetermined ratio or profit-sharing agreement. The uncertainty regarding the expected level of profit may pose a challenge for customers seeking a guaranteed return.
Regulatory Compliance
Islamic banking is required to adhere to stringent regulations and ensure that all products and services align with sharia principles. This process can be intricate and necessitates meticulous oversight to prevent violations, which may consequently restrict product innovation.
Competition with Traditional Banking
