Proportion Based on Capital Contribution

Running head: ISLAMIC AND CONVENTIONAL BANKING
ISLAMIC AND CONVENTIONAL BANKING
Name of the Student
Name of University
Author Notes

ISLAMIC AND CONVENTIONAL BANKING
2
Table of Contents
Assignment III: Individual Research Project..............................................................4
References..................................................................................................................................9
Section B..................................................................................................................................10

ISLAMIC AND CONVENTIONAL BANKING
3
Assignment III: Individual Research Project
Islamic banks perceives that charging interest is wrong i.e. haram
therefore they are working on the concept of equity participation and
profitability. On the other hand, conventional banking is a type of banking
system, which charges interest to their customers based on the taken
loan amount.
The comparison between Islamic plus conventional banking is
provided in the explanation part which will aid to understand the change
between the two lending system. Islamic banking system has gained
popularity from scholars and authors as their system is different from
other banking methods. The remarkable growth of Islamic banking is
provided below.
Explanation
Non-interest banking system is referred and known as Islamic
banking system which acts on principals of Islamic or sharia law as well as
follows the guidance of Islamic economics. Islamic banking gathers profit
by equity participation other than interest. The borrowers provides share
of profit to the bank rather than interest of the loan to the bank.
Conventional banking is the basic banking business, which runs on
interest from borrowers, and it does not have any relation with the Islamic
banking system.
The difference between the two banking system is given below.