Which of the statement on Islamic banking is incorrect?begin{enumerate}item Islamic banking is only for Muslims.item Islamic banking activity do not allow paying and receiving of interest.item Islamic banking promotes the principle of profit sharing between banking institution and depositor.end{enumerate}

BANKING GENERAL KNOWLEDGE

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

Which of the statement on Islamic banking is incorrect?

A	Only 1
B	Only 2
C	Only 3
D	Both 2 and 3.

Explanation:

Detailed explanation-1: -Islamic banking is only for Muslims is an incorrect statement.

Detailed explanation-2: -Islamic banking, also referred to as Islamic finance or Shariah-compliant finance, refers to financial activities that adhere to Shariah (Islamic law). Two fundamental principles of Islamic banking are the sharing of profit and loss and the prohibition of the collection and payment of interest by lenders and investors.

Detailed explanation-3: -Concept of banking based on pooling of excess funds of depositors and channeling them towards those who require it for investing activities is not only approved but encouraged by Islam. But the concept to lending and borrowing on the basis of interest in not allowed in Islam.

Detailed explanation-4: -No Riba/interest: Islamic banks cannot involve in riba/interest related transactions. They cannot lend money to earn additional amount on it.

Detailed explanation-5: -The characteristics features of Islamic banking are divinely sourced, shari’ah compliant banking system, rich with numerous financial concepts, riba (usury) free banking system, garar (uncertainty) free banking system, prohibits injustice, and enjoys benevolence in transactions.

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