Opening Qard Hasan accounts as sources and uses of funds and its effects on the market share of Islamic banks

The objective of this study is to explore how the opening of Qard Hasan accounts as major sources and uses of funds will positively contribute to increase the market share of Islamic banks. The study is based on purely theoretical multiple regression model where partial derivatives are applied to evaluate the effects of individual variables. The findings suggest that if the Islamic Banks adopt the policy of opening Qard Hasan accounts both for lending and borrowing purposes, it will attract more customers and channel more funds into the Islamic banks and as a result, the market share of the Islamic Banks will increase. If Islamic banks pursue the policy of opening Qard Hasan accounts in massive scale, it will also increase the monetization ratio which in turn, will increase market share of the Islamic Banks. Finally, Qard Hasan funds will attract multitudes of customers and increase in Qard Hasan loans in the economy will increase the money supply which will cause a rightward shift in the aggregate demand curve and as a result, both real GDP and employment level will increase, and unemployment rate will fall. Consequently, such prosperity will help people to open more accounts and deposit more funds and as a result, the market share of the Islamic banks will increase. This study is one of the latest attempts to evaluate the effects of opening Qard Hasan accounts in massive scale in all Islamic banks and how it will impact on the market share of Islamic banks. This study will be immensely useful to Islamic banks, Central bank, policy makers, People who are under the poverty line, research scholars, students, and academicians across the world.