Islamic Banking And Conventional Banking

8251 WordsJun 7, 201534 Pages
Content Part One 1. Introduction 2. Study areas 3. Methods of the study 4. Data collection methods 5. Important of the study 6. Key estimated learning from the study Part two 7. What is Islamic Banking 8. What are the transaction process of Islamic banking 9. The key sources of law and values of Islamic Banking 10. The differences between Islamic Banking and conventional Banking Part three 11. A comparative analysis 12. Conclusion Basic differencess: Results indicate that conventional banks perform better in profitability, while Islamic banks perform better in liquidity and credit risk. In t-test of the return on asset (ROA) and total equity to net loans, there are no major difference between Islamic banks and non-Islamic banks. In the return on equity and common equity to total assets, there are statistically significant differences in these two groups. The statistically significant difference was shown in the area of liquidity which means that the Islamic banks liquidity performance has major difference with the non-Islamic banks. In general, Islamic banking system is based on Sharī’ah principle, while non-Islamic banking system is based on interest rate. Sharī’ah is a set of norms, values and laws that go to make up the Islamic way of life. Characteristics of Sharī’ah -compliant banking and financial system are free from riba. Riba is prohibited in Islamic banking system, because Islamic banking system is based on the sharing of risk and profit. Interest is
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