Question

Fundamental Differences between the Islamic banking and Traditional banking.

• What are the activities which are permissible/prohibited in the two types of banking mentioned above?
• What are the motives for the banks in the two types of banking mentioned above?
• What are the procedures related to lending/saving in the two types of banking mentioned above?
• What rules and regulations do banks follow in the two types of banking mentioned above?
• What are the opinions of some big individual as well as retail investors on the two types of banking mentioned above?
• Who are some of the major players in the two types of banking mentioned above?

Answer 1

Solution-Differene between islamic banking and traditional banking

1)Activities-In Traditional banking all activities are permissible but in islamic banking all activity must be free from the element of uncertaintly(Gharar) and gambling(Maisir).

2) Motive=Islamic banking promotes just fair and balanced society.Hence interest is prohibted.Traditional banking is based on commerical object and interest must be paid.

3)Rules and regulation=Islamic banking is strutured on ethical and moral framework of sharia.Verses from the holy Quran and tradition From as sunnah are two divine guidance.In tradional banking thers is no such framework.

4)Opinion= In islamic banking interest is not charged on funds so thats why big as well as small indiviual has postive opinion on islamic banking.