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Saudi Arabia is home to millions of expatriate workers, significant proportion of whom are non-Muslims. In the increasingly competitive Saudi banking sector, both local and multinational banks are trying widen their customer base by marketing their Islamic banking products to these non-Muslim customers. A market study was conducted to evaluate the perceptions of non-Muslim expatriates in the eastern region of Saudi Arabia towards Islamic banking products & services. Data gathered through self-administered questionnaires from non-Muslim expatriate bank customers (n=103) in the Eastern Province of Saudi Arabia was used for the study. Results of the study indicate that all the respondents were aware of and had prior Islamic banking exposure and that cheaper transaction costs and better service delivery were the main reasons that attracted them to using Islamic banking services. Though a majority of the respondents were convinced of the social benefits that can accrue from the interest-free Islamic banking principle, this was however not the primary reason for their utilization of Islamic banking services in Saudi Arabia.
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