The Differences Between Islamic Banking and Conventional Banking Essay

The Differences Between Islamic Banking and Conventional Banking System - Essay Example This essay discusses the Banks, that play a crucial role in the management of money from depositors and lending money to the needy, today banks are also indispensable for and international payments system. Individuals, organizations or governments do not only need banks as safe custody of their money, but they all also need to circulate their funds like money getting transferred from buyers to sellers or employers to employees. In this case banks play a prominent role too. They handle payments like issuing personal cheques to making electronic payments of large amounts between banks. In today’s era of international trade, most payments are administered instantly. An efficiently managed system of payments is indispensable for a stable and growing economy, and any inefficiency in the payments system can hinder smooth trade and therefore can significantly hamper economic growth. In this ongoing global economic recession, the Islamic banking structure that is described in the essa y is gaining increasing popularity among the non-Muslims across the world due to its broader product services and its ability to stand against the odds of economic recession where many conventional banks are collapsing. The major purpose of Islamic banking system is to manage and distribute finance in the manner that complies with the Islamic laws and principles. The growing popularity of Islamic banks among the non-Muslims is due to its â€Å"strict lending principles, reflecting industry efforts to transcend religious beliefs to gain greater market share†