Difference Between Islamic Banking And Conventional Banking Meezan Bank

Differentiate between the concept of islamic and conventional banking covered in chapter 20 differentiate between the governing principles and business model frame works of islamic and conventional banking. Islamic banking products are usually asset backed and involves trading of assets renting of asset and participation on profit loss basis. The country like in malaysia has successfully developed an islamic banking system that operates in parallel with the conventional banking system.

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Debunking Myths About Islamic Banking Meezan Bank Limited Facebook

Difference Between Islamic Banks And Conventional Banks

A Comparison Of Islamic And Conventional Banking System

Difference Between Islamic Banks And Conventional Banks

A Comparison Of Islamic And Conventional Banking System

Comparison of islamic and conventional banking by the end of this part you should be able to.

Difference between islamic banking and conventional banking meezan bank. Fundamentally the difference between islamic banking and conventional banking is that the idea fairness to the clients is theoretically focused on the idea of islamic banking itself. Islamic banking is an ethical banking system and its practices are based on islamic shariah laws. In pakistan islamic banking is at infant stage although last 9 years growth is marvelous. Otherwise it s just conventional banking in the guise of traditional.

Lending money and having it back with compounding interest is the essential function of the conventional bank. Interest in completely prohibited in islamic banking. Conventional banks aim to maximize returns and minimize risk. Islamic banking has grown at an average annual rate of 66 in the last nine years 01 04 09 12 in pakistan.

The bank s interest comes before the client s as opposed to the islamic banking system. Difference between islamic banking and conventional banking. In the modern islamic banking system it has become one of the service oriented functions of the islamic banks to be a zakat collection centre and they also pay out their zakat. There are no statistical significant differences in loan deposit ratio between islamic and conventional banks where t values did not reach the level of statistical significance 0 05 and this.

Conventional bank treats money as a commodity and lend it against interest as its compensation. If i remember correctly meezan bank is apparently the cleanest when it comes to islamic banking and then it dubai islamic. In islamic banking profit are distributed out of profit earning by bank for the month as per decided weightages. In conventional banking fixed rate of interest being given to depositors.

In islamic banking leasing ownership remains with bank and risk and reward bear by the bank as owner of asset. Conventional banking in most islamic countries they tend to practice two types of financing in banking industry which are conventional and islamic banking. Let us first understand the major difference between islamic banking and conventional banking system.