FAQs

Islamic banking is also known as Islamic finance, and it is a banking system that uses the principles of Islamic commercial law, and application of Islamic economics

It is call Islamic banking because it employs the principles of Islamic commercial law, and its application of Islamic economics. Islamic commercial law emphasis on ethics, morality and social benefits as paramount to economic activities

Conventional banking is a banking system that operates on man-made laws. Profit making is the paramount objective of conventional bank, and it does so in the expense of ethics and morals. It makes money by charging interest, and creating debts in the financial system

No, Islamic banking is for all regardless of belief. In fact non-Muslim majority countries like UK, Japan, Canada, Australia, and South Africa, all have adopted Islamic banking system. The system eliminate debt, and create healthy economic system with freedom from debt burden

Islamic bank operates on principles of Islamic commercial law, while conventional banks operate on the principles of man-made business laws. Islamic banks make money from profits, while conventional bank made money by charging interest. Islamic bank do operates in a business that involves excessive uncertainty, while conventional bank operates on uncertainty and speculations. Islamic bank does not deals in only ethical business and products, but conventional bank deals in un-ethical businesses

  1. Riba means usury or interest. It is defined as any money charged for the use of money, without doing any work by the financier. Riba is unjust and exploitative business transaction

Islamic economic system is based on justice between giver and user of money. None of them need to be assured of fixed return without doing any work or sharing the risk. The rationale behind this is to eliminate exploitation, and create fair, and just economical system