From the comparative analysis in between Islamic and conventional banking systems, it has been quite prominently revealed that IFIs have shown tremendous effectiveness in recent years rather than conventional banks…
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A conventional bank is regarded as a financial intermediary, which receives money and deposits, and channels those deposits into lending activities, along with paying and collecting cheques for its customers. During business activities, conventional banks offer several other services and facilities to its customers. Thus, it can be asserted as a bank links together its customers that have capital deficits and capital surpluses. Conversely, an Islamic bank consists of the principle of developing Islamic economics through banking activities. During the last few decades, Islamic banking industry has experienced a sustainable growth rate of around 10-15% per annum. At the same time, it is also observed that this industry is steadily growing towards conventional financial systems (Sole, 2007).
According to the observation, it is determined that the Islamic banking industry not only operates its functions in major Muslim populated countries, but also it has operated its banking activities in low crowded Muslim countries such as the United Kingdom, Malaysia and Japan among others. Consequently, the Islamic banking industry has granted its banking license for expanding its banking operations in several countries such as India and Syria among others. Besides, it has been acknowledged that Islamic banking industry has in excess of 300 branches among 51 countries around the world where Islamic banking system is followed (Sole, 2007). In terms of key products offered to the customers in both the banks they include mortgages (home loan), car loans, personal loans along with credit facility.
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The research presents a thorough analysis of the basic difference between Islamic and conventional financing methods through literature analysis and effective research methods. The primary research collected from respondents helped in understanding their views and opinions on Islamic and conventional financing methods.
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8 Pages(2000 words)Research Paper
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