This study examines the impact of switching barriers comprises of complexity, switching cost, locked-in, and apathy on the switching decision. The data were collected through a survey questionnaire from three cities (Muscat, Salalah, and Sohar) with a sample of 420 respondents. The participants were Omani nationals only. The data were analyzed using Structural Equation Modelling (SEM) Analysis using SPSS and AMOS software. The data were tested for the normality, descriptive analysis, reliability, correlation, exploratory Factor Analysis (EFA) and Confirmatory Factor Analysis (CFA). The result of the switching barriers indicates that apathy fail to influence the negative relationship with switching decision. However, switching cost, complexity and locked in had a negative impact on the decision to switch that creates barriers among the customers while switching from conventional banking to Islamic banking system. The study concludes that the government, management, and Shariah board of the Islamic banks should focus on establishing a robust and dynamic Islamic banking, which caters for customers’ needs. Finally, Islamic banking products and service, financial and non-financial strategies should address the customers’ financial needs and provide comprehensive banking services.

This paper critically evaluates the practice of partnership-based or equity-based sukuk (Islamic bonds) structure in light of the problem concerning default. The study focuses on the debt characteristics built into the equity structure before and after the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) announcement in 2008. A closer examination the structure of two musharakah (joint venture) sukuk that practice in the market has demonstrated „why‟ sukuk are experiencing default situations. While ideally the element of risk avoidance and profit-sharing should present in the structure, due to market presssure, these structural features practically turned the equity-based profit-and-losssharing arrangements into fixed-income instruments. Ultimately, the structure that should practice „no concept of fixed obligation‟ has in fact defaulted on its obligations. Keywords: Sukuk (Islamic Bonds), Shariah (Islamic Law), Default, Profit-sharing, Musharakah (Joint venture).