OUTLINE

INRODUCTIONS

Difference between conventional and Islamic banking

SAVING ACCOUNTS

Instability of the economy

Introduction
 Islamic Banking is a system of
banking that is in accordance with
the spirit, character and value
system of Islam and is guided by
islamic Shari'ah principles.
 In order to increase money must be
used in a productive manner, so
invest in real goods. Creating
money from money alone is
prohibited, therefore interest is
not allowed.
Difference
 Conventional  Islamic
The conventional  Islamic banking is
bank is based on an interest free
a full-fledged banking system
intermediary model that is governed by
that lends the principles  of
borrowers to islamic Sharia .
suppliers and then
loans to  Islam Shariah
companies or
individuals.  refers to the
guidance and laws
given by the Holy
Quran, the Hadith .
 .
Saving and Investment
Interest
In conventional banking saving
investment based on riba .,fixed
rate of interest being given to
depositors.
In Islamic banking, the saver or
investor receives the earnings
according to the ratio on their
savings balances or investments.
profit are distributed out of profit
earning by bank for the month as per
decided weightages.
Financing
 Financing at an Islamic
Bank is contractually
 Conventional recorded. For housing,
financing is a vehicle, parcel,
home financing equipment, etc., the
rule applies that the
scheme offered bank purchases the
by financial product, on request, for
institutions or the benefit of the
applicant.
banks, which  The product is bought
are not by the bank of the initial
guaranteed by owner in cash and then
resold to the applicant.
government in accordance with the
agencies. That conditions.
is based on  The applicant repays
the bank in
interest. installments,
 Types
 Fixed-rate mortgages have
an interest rate that does not
change for the life of loan.
15- and 30-year terms are
the most common.
 Adjustable rate
mortgages have an interest
rate that does change.
There’s an initial up-front
period when the rate is fixed.
During this time, the interest
rate and monthly payments
are even lower than a fixed-
rate mortgage.  
  PARTNERSHIP
 An Islamic bank is an
alternative for small and
medium enterprises. The
bank offers opportunities to
start the business together
with the client, whereby both
the generated profits and the
risks are shared by both
parties.
   Mudarba, musharkah
Rental based
 Is an agreement whereby
the lessor leases vehicle,
equipment, construction or
other facilities to a client at
an agreed rental price or
costs, as agreed by both
parties. Ijara is the example