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There are currently 10 Islamic banks in Bangladesh. This number has risen to ten as two banks have recently introduced the Islamic banking system. What is the difference between Islamic banking and the conventional banking system?
Tasnima Khan, a professor in the Department of Banking and Insurance at Dhaka University, said the main difference was in the calculation of interest and earnings.
He said that there is a topic of interest in conventional banking. When we deposit money in the bank, we have to pay interest at a certain rate. Whether it’s the bank’s profit or loss, it doesn’t matter to us that we’re depositing money. But since interest is forbidden in Islam, for many it is a lot like gambling.
The main difference
Tasnima Khan used to say that in the case of Islam it is said that it will be a method of sharing. “Profit and loss sharing” means that since the bank does not allow me to deposit, I can get dividends on my deposit if the bank makes a profit. But if the bank suffers a loss, I will not be eligible to receive dividends. This is the main difference between conventional and Islamic style benches.
Islamic banks work with PLS, that is, “ profit and loss sharing ”, but traditional banks or conventional banks have a fixed rate.
The same can be observed in the case of bank loans.
করলে If I take a loan, the conventional bank will not see if I can use that money profitably. They will deduct interest at a certain rate. But the Islamic banks don’t have that system, ”he said.
The main objective is to make a profit in traditional banks. But the issue of earnings does not take priority in Islamic banks.
This is how the countries of the world that have an Islamic banking system operate.
Some aspects of the Islamic style
Mudaraba concept – Profit sharing
Murabaha – sold for profit (in case of loan)
Musaraka – Distribution of profit and loss
And in the case of sharing these gains and losses, many people think that the Islamic method is not followed. Nurul Amin, former president of the Bangladesh Bankers Association, said that one of the similarities between the two types of banks is their authority or regulation, namely the Bank of Bangladesh. However, there is no Islamic wing at the central bank.
Amin said: ‘The Islamic part of the bank’s profit or loss can be part of the profit. Nothing will be arranged in advance. But in our country Islami Bank already knows the rate, what percentage of the depositor will make a profit. ‘
Economists say the way Islami Bank operates in Bangladesh is worrying. There are some limitations in the way it is carried out in Bangladesh in a totally Islamic way.
Why Islamic Style Benches Are Popular:
For those in our country who believe in Islamic thought, it may seem haram to keep money in a bank.
Tasnima Khan said: “The thinking of most people is that they believe that this money is being invested and getting a return on it. That means they don’t think it’s a game. They consider that meaning to be valid. It makes them a place of comfort. As a result, conventional banks maintain their Islamic windows and Islami Bank branches.
There are ten Islamic banks in Bangladesh
Islami Bank, ICB Islamic Bank, Al-Arafah Islami Bank, Social Islami Bank, Exim Bank, First Securities Islami Bank, Shahjalal Islami Bank, Union Bank, Standard Bank, NRB Global Bank. Among them, Standard Bank and NRB Global Bank have recently launched the Islamic banking system.
NRB Global Bank has been renamed Global Islami Bank as of today. The bank has been launching Shariah-based Islamic banking since the beginning of the new year.
In addition, conventional banks have around 70 branches and windows for Islamic services.
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