MANAGEMENT

Detailed explanation-1: -Under IFSA 2013, Islamic banks are required to separate the funds placed by customers into Islamic deposit and investment accounts. While the deposit account is principal-guaranteed hence risk-free; the investment account is subject to potential loss because it is not protected or guaranteed.

Detailed explanation-2: -Islamic banking is an interest free banking system and is governed by the principles laid down by Islamic Sharia’h. Commonly Islamic modes used for saving deposits is Mudharaba and Qarz for current deposits while Murabaha, Ijarah, Diminishing Musharakah and other modes used for financing.

Detailed explanation-3: -One of the primary differences between conventional banking systems and Islamic banking is that Islamic banking prohibits usury and speculation. Shariah strictly prohibits any form of speculation or gambling, which is referred to as maisir. Shariah also prohibits taking interest on loans.

Detailed explanation-4: -UNDER ISLAMIC PRINCIPLES: Paying or charging interest, known as riba (usury), is strictly prohibited. Investing in businesses that are centered on activities considered to be haram, like producing or selling alcohol or pork, is forbidden. Speculation or gambling, known as maisir, is not allowed.