DIFFERENCE BETWEEN ISLAMIC BANKING AND CONVENTIONAL BANKING PDF DOWNLOAD

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Difference between Conventional and Islamic banking

For example, you cannot take a loan for a Wine Shop. If the supplier has delayed the delivery after receiving the full price, the lessee should not be liable for the rent of the period of delay. Ultimately, the customer becomes difference between islamic banking and conventional banking pdf download sole owner.

These study contents are taken from Islamic banking and finance courses. Therefore, it can be sold at a price higher than its face value and it can also be rented out. Interest in completely prohibited in Islamic banking.

Due to increase in the real GDP, the net difference between islamic banking and conventional banking pdf download amount becomes positive, this reduces foreign debts burden and local-currency becomes stronger. Due to control over inflation, no extra price is charged by the entrepreneur. Islamic Banking and Conventional Banking – Major Differences Now, let us review some major differences between Islamic banking and conventional banking systems: This invites further foreign debts and the local-currency becomes weaker Due to increase in the real GDP, the net exports amount becomes positive, this reduces foreign debts burden and local-currency becomes stronger These study contents are taken from Islamic banking and finance courses.

Difference Between Islamic Banking and Conventional Banking | AIMS

Due to failure of the projects the loan is written off as it becomes non performing loan. This invites further foreign debts and the local-currency becomes weaker.

It is profit-oriented and its purpose is to make money through interest”. Balance budget is the outcome of no expansion of money. It is asset based financing, in which trade of elements prohibited by Islam are not allowed. Due to decrease in the real Dodnload, the net exports amount becomes negative.

Interest is charged even in case, the organization suffers losses. This results decrease in the real gross domestic product.

Let us first understand the major difference between Islamic banking and conventional banking system. This results decrease in the real gross domestic product Sharing profits in case of Mudarabah and sharing in the organization of business venture in case of Musharakah, provides extra tax to Federal Government.

Real growth of wealth does not take place, as the money remains in few hands. In case, the businessman has suffered losses, the bank will share these losses based on the mode of finance difference between islamic banking and conventional banking pdf download Mudarabah, Musharakah. Therefore, it cannot be sold at a price higher than its face value or rented out.

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Sharing profits in case of Mudarabah and sharing in the organization of business venture in case of Musharakah, provides extra tax to Federal Government. Therefore, it is not based on profit and loss sharing. Real growth in the wealth of the people of the society takes place, due to multiplier effect and real wealth goes into the ownership of lot of hands. Conventional banks use money as a commodity which leads to inflation.

Time difference between islamic banking and conventional banking pdf download is the basis for charging interest on capital. Our Islamic Finance Programs. This leads to minimize the tax burden over salaried persons. Islamic bank operates on the basis of profit and loss sharing. Accordingly, the customer and the xifference become the joint owners of the property in proportion to their share in purchasing the property.

What is Islamic Banking?

Download this lecture in PDF. List of bank charges.

Under Islamic mortgage finance facility, Islamic bank shares with the customer in purchasing his desired property.