The differences between Islamic bank and conventional bank are

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

A	the prohibition of riba (interest, usury), gharar (excessive uncertainty) and haram (impermissible) activities
B	the implementation of profit and loss sharing (PLS) principle.
C	the emphasis on productivity and real economic activity (rather than credit worthiness)
D	all of the above

Explanation:

Detailed explanation-1: -Conventional Bank treats money as a commodity and lend it against interest as its compensation. Islamic banking products are usually asset backed and involves trading of assets, renting of asset and participation on profit & loss basis. Relation of customer & bank is of Creditor-Debtor.

Detailed explanation-2: -The main difference between Islamic and conventional finance is the treatment of risk, and how risk is shared. In this article, we examine what these differences can teach us about risk and risk management in conventional banking and financial markets.

Detailed explanation-3: -Islamic banks are mostly concerned with the issues of public interest and they belief in profit and loss sharing principle of investment. On the other hand, conventional banks belief in the rule of maximization of profit, and the main source of income is the interest that they get from loans advanced to their clients.

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