Difference between Islamic banking and conventional banking system: EXIM Bank Limited

Abstract

A Bank is an economic institution whose main aim is to earn profit through exchange of money & credit instruments. It is a service oriented as well as profits oriented organization. The internship report has been prepared on “difference between Islamic banking and conventional banking”. As EXIM bank was a conventional bank later become a Islamic bank it is easy for me to find the difference between the Islamic banking system and conventional banking system. EXIM Bank Limited was introduced in Bangladesh as a banking company under the Company Act 1913 & commenced operation on 2nd June 1999 as a conventional bank. Later in 2004 they became Islamic bank which actually works under the shariah rules. Sariah rules basically follow the partnership based banking. As in Islam interest is prohibited thats why Shariah rule introduces profit sharing system. The motto of Islamic banking is profit sharing and loss bearing. The main objective of Islamic banking is as same as conventional banking system which is profit making. To follow the shariah system Islamic banks actually follow certain terms which is known as Mudharabah, Wadiah, Musharakah, Murabahah, Ijar. Exim bank actually divides their whole work into 2 parts which is General banking & investment. In this report I try to show that how the Islamic banking system differ from conventional banking system. Where in conventional bank we get fixed amount of interest which is also known as RIBA, there in Islamic bank we get a certain share of banks total profit.