Islamic banking and conventional banking are two distinct systems that operate on different principles and practices. In the context of the Rqf Level 5 Certificate in The Concepts of Islamic Finance and Banking online, it is crucial to understand the key differences between the two.
| Islamic Banking | Conventional Banking |
|---|---|
| Based on Shariah principles, which prohibit the payment or acceptance of interest (riba). | Interest-based system where interest is charged and paid on loans and deposits. |
| Focuses on profit-sharing and risk-sharing arrangements, promoting fairness and transparency. | Primarily focused on lending and borrowing, with fixed interest rates. |
| Prohibits investments in industries such as alcohol, gambling, and pork. | Investments are made in various industries without restrictions. |
| Encourages ethical and socially responsible investments that benefit the community. | May prioritize profits over social and ethical considerations. |
Overall, Islamic banking operates on ethical and Shariah-compliant principles, promoting fairness, transparency, and community welfare. Understanding these differences is essential for students pursuing the Rqf Level 5 Certificate in The Concepts of Islamic Finance and Banking online, as it provides a comprehensive understanding of the unique aspects of Islamic finance.
By mastering these concepts, students can navigate the complexities of Islamic banking and contribute to the growth and development of the Islamic finance industry.