Islamic banking and conventional banking are two distinct systems that operate on different principles and practices. Here is a comparison of the two in the context of the Ofqual Level 5 Certificate in The Concepts of Islamic Finance and Banking (fast-track):
| Aspect | Islamic Banking | Conventional Banking |
|---|---|---|
| Interest | Prohibited (riba) | Interest-based |
| Risk-sharing | Emphasized | Limited |
| Asset-backed | Required | Not always required |
| Ethical principles | Follows Islamic principles | Varies |
In conclusion, Islamic banking and conventional banking differ in their approach to interest, risk-sharing, asset-backing, and ethical principles. Understanding these differences is crucial for students pursuing the Ofqual Level 5 Certificate in The Concepts of Islamic Finance and Banking (fast-track).