Traditional banking system is interest-based, which is prohibited by Islam strictly. Because interest is a curse towards human society. It hinders development, creates difference between rich & poor & reduces investment. On the other hand Islamic banking is free from any interest.
We have to know what Islamic banking is. It is said by OIC- Islamic bank is a financial institution whose statutes, rules & procedures expressly state its commitment to the principles of Islamic shariah & to the banking of the receipts & payments of interest in on any of its operation.
a. Islamic bank is committed to operate according to the principles of Islamic shariah.
b. It is free from interest in paying & receiving.
c. It does not deal in money but deals with money as a means to finance productive trading & investment activities, either directly by themselves or in partnership with others seeking to earn profit.
d. It is required to pay to the Zakat funds 2.5% of its capital & profit in every year for the benefit of the poorer section of the country.
e. It shares in the profit & losses if any of enterprises as per agreement with those who take funds from it for actual trade.
f. It has provision for Quard-E-Hasana or beneficent loan in deserving cases without consideration of profit.
The traditional banks take maximum interest at any cost. Material gain is their only target. But Islamic bank wants to help the poor or needed person. It cannot invest its fund to any harmful project. Thus all the efforts & activities it runs towards the socio-economic well being of human society. By this why it can sure-
a. Allocated efficiency of funds.
b. Increase of the investment.
c. Stability in the value of money.
d. Reduce inflation.
e. Mobilization of savings.
In the light of above discussion Islamic banking as a career is lucrative, prospective & bright future to play a vital role for the socio-economic development of the nation as well as for the whole mankind.
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