Major Differences Between Islamic And Banking System

569 words - 3 pages

Major Differences between Islamic and Banking System |
|
Islamic System |
| Conventional System |
|
Money is a product besides medium of exchange and store of value. | Real Asset is a product. Money is just a medium of exchange. |
Time value is the basis for charging interest on capital. | Profit on exchange of goods & services is the basis for earning profit. |
Interest is charged even in case, the organization suffers losses. Thus no concept of sharing loss. | Loss is shared when the organization suffers loss. |
While disbursing cash finance, running finance or working capital finance, no agreement for exchange of goods & services is made. | The execution of agreements for the exchange of goods & services is must, while disbursing funds under Murabaha, Salam & Istisna contracts. |
Due to non existence of goods & services behind ...view middle of the document...

Rather, they are disbursed on the basis of Windo Dressed project feasibility and credibility of the entrepreneur. | Musharakah & Diminishing Musharakah agreements are made after making sure the existence of capital good before disbursing funds for a capital project. |
Government very easily obtains loans from Central Bank through Money Market Operations without initiating capital development expenditure. | Government can not obtain loans from the Monetary Agency without making sure the delivery of goods to National Investment fund. |
The expanded money in the money market without backing the real assets, results deficit financing. | Balance budget is the outcome of no expansion of money. |
Real growth of wealth does not take place, as the money remains in few hands. | Real growth in the wealth of the people of the society takes place, due to multiplier effect and real wealth goes into the ownership of lot of hands. |
Due to failure of the projects the loan is written off as it becomes non performing loan. | Due to failure of the project, the management of the organization can be taken over to hand over to a better management. |
Debts financing gets the advantage of leverage for an enterprise, due to interest expense as deductible item form taxable profits. This causes huge burden of taxes on salaried persons. Thus the saving and disposable income of the people is effected badly. This results decrease in the real gross domestic product. | Sharing profits in case of Mudarabah and sharing in the organization of business venture in case of Musharakah, provides extra tax to Federal Government. This leads to minimize the tax burden over salaried persons. Due to which savings & disposable income of the people is increased, which results the increase in the real gross domestic product. |
Due to decrease in the real GDP, the net exports amount becomes negative. This invites further foreign debts and the local-currency becomes weaker. | Due to increase in the real GDP, the net exports amount becomes positive, this reduces foreign debts burden and local-currency becomes stronger. |
|

Other Papers Like Major Differences Between Islamic and Banking System

Differences Between Leadership and Management Essay

1112 words - 5 pages most importantly providing useful change in the organization. The main differences between leaders and managers are: the relationship between the followers and managers and leaders, how leaders and managers solve problems, and the difference in emotional intelligence between leaders and managers. Leaders and managers have a difference in emotional intelligence. A leader is an individual who strategizes a visionary and most importantly someone who

Differences Between Men And Women Essay

648 words - 3 pages DRAFT Introduction: Have you ever thought that why people are different from each other? There are many differences such as intelligence, opinions, appearances, personalities which are the most basic one. Genders represent the differences and also similarities between men and women. Both sexes differ from each other greatly in some respect such as physical power, communication and also emotional needs. Body Paragraph: A) Topic Sentence

Differences Between Fear and Anxiety

1032 words - 5 pages 1.(SID# 32250) Describe the differences and similarities between fear and anxiety. The average layperson might use the terms fear and anxiety interchangeably. To behavioral scientists, however, fear and anxiety are two distinct emotional conditions and therefore require different forms of treatment. Fear is defined as an intense and unpleasant emotional state aroused by anticipation or awareness of a specific threat. Anxiety is a diffuse

Differences Between Adn and Bsn

785 words - 4 pages the BSN and ADN nurse. It concluded that there was either no difference in the physical assessment content taught at the programs or that the differences between these programs do not impact the clinical arena. (Giddens, Journal of Nursing Education, Mar 2006) For me the bedside nurse was always my goal and to learn of ways to empower my patients to take control of their own health so expanding my education to a BSN will help me achieve this

Differences Between Adn And Bsn

754 words - 4 pages Differences Between ADN and BSN There wasn’t always training for nurses, sick and ill individuals were taken care of by "sinners, saints, or mothers". Those nursing the sick were either prostitutes, women of ill repute, or members of religious orders. Women typically took care of the sick in their families.(Hood&Leddy, publication date) Schooling for nurses traditionally took place in a hospital setting. Now there are diversified college

Similarities and Differences Between Nyse and Nasdaq

715 words - 3 pages differences between the two as well. One difference is that the NASDAQ is considered a high tech trading market because most of their components are electronics, technology and internet based companies whereas, the NYSE encompasses more established and bigger companies from different industries. In part this also plays a way in the difference how the two exchanges trade. The NYSE conducts their transactions on the root of physical trading, and the NASDAQ

Sociocultural Differences Between Traditional and Americanism

844 words - 4 pages Sociocultural Differences between Tradition and Americanism Arab and Muslims face many obstacles when faced with orientation and the blending of identities after migrating to the United States (Schaefer, 2007). Grasping traditional cultural practices and embracing a new culture within the United States (Schaefer, 2007). The effects of both cultures present genuine struggles for Arab Americans and Muslims, who practice religious protocols and

The Differences Between Women's and Men's Brain.Docx

1003 words - 5 pages The differences between women and men are not only well-documented, but frequently at the heart of jokes, anecdotes, and good-natured (and not so good-natured) ribbing. Experts have discovered that there are actually differences in the way women’s and men’s brains are structured and in the way they react to events and stimuli. So the next time your wife, boyfriend, or parent starts telling you how you should have done something differently, then

Differences In Worldviews Between Christians And Muslims

612 words - 3 pages Christian Worldview in Contrast to Islam Larry Hering The Islamic worldview of the world’s origin is similar to the Christian view in that they are monotheistic and believe their god, Allah, was the creator. Creation was Ex Nihilo, meaning that our world was created from nothing. The concept of the triune is blasphemous to them so we obviously have a major difference in our view of God and their view of Allah. There is also some indication

The Differences Between Army and National Guard

1127 words - 5 pages soldiers. Congress put UCMJ in action in 1950. National Guard soldiers are still held to the standards of UCMJ while outside of uniform. “The true soldier fights not because he hates what is in front of him, but because he loves what is behind him” –G.K. Chesterton. In conclusion, there are so many differences and similarities between active Army and National Guard. Both Active Army and National Guard give a soldier the ability to make the military a career. No matter which component one chooses the Army is a lifestyle, each component has their benefits and draw backs. No matter the differences between the two of them, they are still defenders of freedom.

Differences in Competencies Between Bsn and Adn

1161 words - 5 pages (Rossetter 2012). However, we will focus more on the differences in competencies between nurses prepared at the associate degree level versus baccalaureate degree level in nursing and identify a patient care situation in which nursing care or approaches to decision making may differ based upon educational preparation. The associate degree program (ADN) which was founded by Mildred Montag due to severe shortage of nurses was designed to

Related Essays

Islamic Banking System In Bangladesh Essay

3190 words - 13 pages . Finally, we would like to express our sincere appreciation to those who provided us with great support and encouragement during our studies. Thanks again to all of them. Executive Summery The report is based on “Banking System variation: A Study on Islami Banking System in Bangladesh”. This topic clarifies the basic differences between the banking systems. The research also shows the outlook of Islami Banking System and provides

What Are The Major Differences Between Nonprofit And For Profit Accounting?

457 words - 2 pages While many aspects of nonprofit and for-profit business accounting are similar (such as the tracking and reporting of income and expenses, and payroll taxes), there are significant differences. These arise out of the nonprofit organization’s duty to drive its resources toward its mission. For example, nonprofits are required to itemize expenses across management (general and administrative), fundraising, and program areas. These are called

Islamic Banking And Finance Essay

2772 words - 12 pages Islamic Modes of Finance Theory and Key Shariah Principles Modes Of Finance • Two are ideal modes which provide an alternative to interest banking and if implemented on a national level will result in much fairer distribution of wealth in society 1. Mushaarakah – ‫رآ‬ (equity finance) 2. Mudhaarabah - ‫ر‬ (equity finance - sleeping partner) • Two are not ideal as they replicate the effects of conventional banking but nevertheless are

Major Theoretical Sociological Perspectives: Similarities And Differences

2475 words - 10 pages Major Theoretical Sociological Perspectives: Similarities and Differences Sociology: the scientific study of the development, structure and functioning of human society (Oxford). When the topic of discussion is sociology, Auguste Comte, the “father of positivism” would come to mind, as it was he who first coined the term “sociology” (Kreis, 2009). Comte also emphasized that the study of society must be scientific and he pushed sociologists to