THE DIFFERENCES BETWEEN ISLAMIC BANK AND CONVENTIONAL BANK

There are a lot of differences between Islamic bank and conventional bank. They are:

• Islamic bank must comply requirement of akidah where the transaction must not have element of riba, gharah, maisir and other business forbidden in Islam.
• When their customers are facing financial difficulties, Islamic financial institution must be caring and more understanding.
• The goal of Islamic financial institution shouldn’t be profit maximization.
• Their transaction should be more transparent. Whereby the client can know the flow and sources of the money. Either it is from legal or illegal activity.
• The operational should differ from those of conventional banks, these include aspect of deposit taking and financing
• Provide services to all communities in the society regardless of the types of customers and their status.
• Must impose charges on customer in accordance with the actual cost incurred in providing the service concerned.