1. Starting in the Name of Allah, The Most Beneficent, The Most Merciful
بسم الله الرحمن الرحيم
Starting in the Name of Allah,
The Most Beneficent, The Most Merciful

2. Islamic Banking

3. Different Economic Systems
Capitalism
Competition is on free market the price, production and consumption of goods based on demand and supply, the trade privately owned and managed for profit.
No regards to unemployment, social growth
Communism
All property and capitals are owned and managed by the state including economic activities, enterprise, labour, production and consumption.
Employment is the state to provide, wages are set by the state according to the national output

4. Different Economic Systems
Islamic System
Market base economy, where goods and services are exchanged freely according to the demand and supply by barter or money with debit or credit value
Entrepreneurs are encouraged to create wealth throw employment and social activities
It is a balance between the two systems, it is emphasis both individual economic freedom and the need to serve the common good

5. Importance of Trade in Islam
Islam has given an immense importance to trade
The nobility of this profession is obvious from the fact that it was the chosen profession of prophet Muhammad (PBUH).

6. WHY ISLMIC BANKING
Before explaining the concept “what is Islamic Banking” the elaboration of concept “why Islamic Banking” is very important.
Islam is a complete code of life that provides guidance regarding each aspect of life.

7. The primary objectives of Islamic Economic System are as under.
WHY ISLAMIC BANKING
The primary objectives of Islamic Economic System are as under.
Equal Distribution of wealth
Social justice
These objectives can never be achieved in Interest/Riba based economic systems.

8. WHAT IS ISLAMIC BANKING
Now we come to our core question
A banking system that is based on the principles of Islamic law (also known Shariah) and guided by Islamic economics. Two basic principles behind Islamic banking are the sharing of profit and loss and, significantly, the prohibition of the collection and payment of interest. Collecting interest is not permitted under Islamic law.

9. DIFFERENCE BETWEEN ISLAIC AND CONVENTIOANL BANKING
Islamic Banking
1) Functions and operations are based on Sharia’h principles
Conventional Banking
1)Functions and operations are based on fully man made principles

10. DIFFERENCE BETWEEN ISLAIC AND CONVENTIOANL BANKING
Islamic Banking
2) Promote risk-sharing between provider of capital (investor) and user of funds (entrepreneurs)
Conventional Banking
2) Investor is assured of pre-determined rate of interest

11. DIFFERENCE BETWEEN ISLAIC AND CONVENTIOANL BANKING
Islamic Banking
3) Aim at maximising profit but subject to Sharia'h restrictions
Conventional Banking
3) Aim at maximising profit without any restrictions

12. DIFFERENCE BETWEEN ISLAIC AND CONVENTIOANL BANKING
Islamic Banking
4) Partners, investor and traders, buyer or seller relationship
Conventional Banking
4) Creditor-Debtor relationship

13. DIFFERENCE BETWEEN ISLAIC AND CONVENTIOANL BANKING
Islamic Banking
5) Encourage asset-based financing and based on commodity trading
Conventional Banking
5) Based on money trading. Money is a medium of exchange and not a commodity, its sale and purchase is prohibited in Islam.

14. DIFFERENCE BETWEEN ISLAIC AND CONVENTIOANL BANKING
Islamic Banking
6) No right of profit if there is no risk involved. The profit and loss sharing depositor may lose money in case of loss.
Conventional Banking
6) It is almost risk free banking and depositor has no risk of losing its money because interest is guaranteed.