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Differences between Islamic and Conventional Banking - Essay Example
There are different ways in which the banking systems present today work. This may depend on the geographical and demographical position of the system, the social structure that surrounds it, among many other factors…
This is seen even in the manner in which their education system is run. They follow the Shariah law in everything they undertake so that the system cannot be corrupt by any foreign or western influence. Conventional banking may not be strict in the monitoring of any religious laws, but they must have a code of conduct to guarantee the smooth operations of the organization. This paper will scrutinize the contrasts between the two types of banking, and differentiates them, even in this day and age.
International conventional banking systems are feeling the pressure that is brought on by Islamic banking. They are, therefore, trying to incorporate this system to suit current times. This incorporation is done in compliance with Shariah principles in different regions, for example, Pakistan. It is the belief of many that only the religious factor counts in Islamic banking. This may not be entirely true. People often look at other factors, for example, customer and employee interactions, financial services, and convenience that may determine whether a customer may opt for Islamic or conventional banking (Quresh, Hussain & Rehman 2012). These factors, in different Muslim strongholds, may assist the banking systems present choose or decide to have various services for their customers.