Differences between Islamic banking and conventional banking.Conventional Banking Islamic Banking
1. Islamic banks functions and operating modes are based on the fully manmade and risk transfer principles. 1. Islamic banks functions and operating modes are based on the rules of Shariah, which is as a divine guidelines as given by the holy quran and the al-Sunnah (Hadith) of the prophet Mohammad and embodies all aspect of the Islamic faith, belief and practice.
2. Conventional banking is assured by interest rate based debt financing resulting in continuous decoupling of the two sectors of the economy and increased fragility of the system. 2. The basic principle of Islamic banking is the risk sharing and the prohibition of riba between provider of capital and user of funds. There is one-to-one
…show more content…
Conventional banking target at maximizing profit without any restriction (Shariah compliance) 3. Islamic banking target at maximizing profit subject to Shariah restrictions.
4. Conventional banking does not deal with Zakat (obligation payment). 4. Islamic banking has become one of the services-oriented functions of the Islamic banks to be a Zakat Collection Center and they also pay out their Zakat.
5. The primary functions of conventional bank includes lending money and getting it back with compounding interest. 5. Islamic contracts used in Islamic banking are trust financing (Mudarabah), safekeeping (Wadiah), partnership (Musharakah),facility agreement (Murabahah) and leasing (ljarah).
Takaful
Takaful is gotten from an Arabic root word “kafala” which means responsibility, guarantee, pliability or suretyship. Takaful also means joint guarantee, shared responsibility, shared guarantee, collective assurance and mutual undertaking. This imitate a joint relationship and understanding of common help among individuals in a specific group.
Four original principles of Takaful:
‘Ta’awun’
Which is the mutual co-operation or mutual help of a group of public.
Redemption is what Amir longs for. Redemption is what Amir is granted. Amir realizing he gave everything for this one selfless act, is able to be at peace; but faith smiled on Amir and sent Sohrab to rescue him from certain demise. Struck with Sohrab slingshot, Assef had given up the fight. Amir was the victor, but there was no prize kite to be handed to him. There was the prize of forgiveness, redemption and the care for Sohrab.
Religion is one of the oldest and most sacred things in history. It was passed down for generations both orally and in writing. Religion started off as a very simple belief in an afterlife. Over time it became more complex and began to include deities and rituals. Each area of the world developed its own beliefs and practices, but two religions that are very similar and yet vastly different are Islam and Christianity. These two religions are the biggest religions in the world with a combined total of approximately 3.4 billion followers. Their similarities and differences can be seen in how their religious books were put together and their beliefs and practices.
Whether the beliefs consisted one God or many, religion was a huge aspect of many cultures everyday life. Religion seemed to be held on a higher pedestal back in the early days of religion, however the fact that many of these religions are still present in today’s history is amazing. Many of these religions actually have a good amount of similarities. Ones they each adopted and changed to better fit their beliefs. Between Egyptian beliefs, Buddhism, Islamic, and Christianity religion was a key aspect in living their everyday lives.
“Religion—or at least, religious inquiry—is something that virtually everyone has in common. In all corners of the world and in all eras of history, humans have wondered about the origins of the universe, the purpose of life, what it means to be human, and what happens after death” (religionfacts, par. 1). Christianity and Islam are two out of the 4,200 religions that give people a sense of beliefs and what it means to be human. They are also two of the most popular religions. (Chappell, par. 3) Islam gets its name from the Arabic language, which means to “surrender”. The Islamic religion believes that people should surrender to the will of Allah(also known as god.) One way that is to be believed that the Christianity religion got its name is by being a follower of christ. Another way Christians got their name according to the webster dictionary is from a greek word “Christos.” (Webster, sec. 3)
Right before he goes to run the blue kite, Hassan says to Amir, “For you a thousand times over!” (Hosseini 67). This is one of the most significant quotes in the novel, The Kite Runner by the number one New York Times bestselling author Khaled Hosseini. This quote means to do anything, no matter what deed or task, however many times for a person. A common phrase exchanged between loyal friends or partners. Speaking of loyalty, this is one of the main themes present within The Kite Runner. Quite frequently and especially in this novel, loyalty often comes with the reality of (ADD MORE) In the novel, The Kite Runner by author Khaled Hosseini, the theme of loyalty is present throughout the book and especially
Christianity and Islam are two religions that grew from the same central idea of one divine being; they also originate from Jerusalem. However, the two religions bear great disparity but they also hold a few similarities. Both Islam and Christianity believe in Abraham as the forefather of both religions; they believe Him to be the founder of the two religions. The two religions have a holy book; Islam uses the Quran while Christians use the bible. Even though the two books do not bear the same teachings they are considered sacred in both religions. However, Christianity and Islam share a great deal of differences starting from the holy books, their beliefs, and the information contained in the respective holy book (Kavanaugh, 5).
Islamic finance is a financial system that operates according to Islamic law (which is called sharia) and is, therefore, sharia-compliant. Just like conventional financial systems, Islamic finance features banks, capital markets, fund managers, investment firms, and insurance companies. However, these entities are governed both by Islamic law and the finance industry rules and regulations that apply to their conventional counterparts. Therefore, islamic finance is to be assets based as oppose to the currency based whereby investment structured on exchange or ownership of assets, and money is simply mechanism for transaction process. It would based on two sources which are Al-Quran and As-Sunnah.
Islam and Christianity have a vast amount of similarities as well as differences. Islam searches for guidance from the Qur’an and Christianity depends on faith in Jesus. Islamic faith believes in the God, Allah. Above anything else, all religious Muslims obey Allah and his commandments to obtain peace. On other hand, Christianity puts faith in Jesus who is the son of God. A major concept that separates both of the religions is the fact that the God of each faith has different qualities. This means Islam and Christianity don’t worship the same God. Islam and Christianity are two separate belief systems in which two separate Gods exist.
There are a number of features or principles which are attributable to the Mudarabah contract. These include nature of contract, capital, profit sharing right and treatment of losses.
As the world has recently passed through the global financial crisis that begun in 2008 in the USA with the banks’ collapsing, analysts are giving different opinions and making new economic hypothesizes about the origin of, as well as the process of different countries escaped from the crisis. Among all these new “theories”, the case of Islamic banks is interesting in terms of its nature and consequences. In my essay, I will try to highlight the basic principles of the Islamic finance, the reasons of the restriction of interest, the most important tools used by Islamic banks in economic activities and brief explanation of them, and finally my view point of the probable future improvement of the Islamic financial system.
Sharia Law Did you know that the Islamic religion has a very specific law which is the Sharia Law? There are three important things you need to know about the Sharia Law. These are the source and the basis of the law code, the authority that is final in the law code, and how religion influences the law code. Sharia law is a very unique law that was made for the Muslims to follow. It is based on the Quran, Hadith, and Sunnah, this is what makes it unique.
In simple words, Banking can be defined as the business activity of accepting and protection money owned by other individuals and entities, and then giving out this money in order to earn a profit. However, with the channel of time, the activities covered by banking business have widened and now various other services are also offered by banks. The banking services these days include issuance of debit and credit cards, providing safe custody of valuable items, lockers, ATM services and online transfer of funds across the country / world .In Lebanon there is two types of bank ,local bank and foreign bank. One of the best local bank in Lebanon is "Blom Bank" and on the other hand ,"HSBC" BANK is the most popular foreign bank in Lebanon
Zakat is the third pillar of Islam. It is an Arabic word, and translates as purification or growth. It is generally thought of as a tax, as the contributor should pay 2.5% of their wealth to charity. However, Zakat is valued not because of the money given, but the motive behind it. The intentions for giving Zakat should be pure, and simply about pleasing Allah, and earning good deeds.
Our group have been assinged to discuss on the topic above but in Islamic Banking perspectives. Therefore, before going any further, let us clarify definition of the Principles of Islamic Banking and clarify what are the elements involve in the Principles of Islamic Banking. Beside, we will also do some comparison of product or services offered by both banks which are conventional and Islamic banking. Apart from that, we will also clarify the problems or challenge faced by the agency which practices the Islamic banking in their agency.
Sharia covers all aspects of a Muslim’s life and is used as guidance for the right path to follow.