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Difference between Sharia Banks and Conventional Banks

Difference between Sharia Banks and Conventional Banks

With the passage of time and the development of the era, now in the world of banking, the community is introduced to two types of banks, namely Islamic banks and conventional banks. Maybe for some ordinary people who do not understand the difference between Islamic banks and conventional banks consider the two types of banks the same. but apparently, there are fundamental differences that are fundamental from the two types of banks

In terms of Islamic banks is a banking institution that is managed by using Islamic principles. Whereas a conventional bank is a banking institution with a conventional banking management system. In its activities, the bank will provide payment transaction services in general in accordance with the provisions and procedures set by the state.

The presence of Islamic banks was welcomed by the public at large even though they did not yet fully understand the differences between Islamic banks and conventional banks. For those especially those who are Muslim, from the name of Islamic banks are considered better because the banking system uses the basis of Islamic law. But is that really the case? The following explanation.

Know the Difference between Islamic Banks and Conventional Banks

- In terms of profitability

Both types of banks provide benefits for their customers. The difference lies in the different forms of giving benefits. While the benefits provided by conventional banks come from interest as well as from the core activities of bank operations.

- In Terms of Business Forms

When looking at the differences between Islamic banks and conventional banks when looking at the type of business, the customers save money in Islamic banks there is no interest, but called profit sharing. Therefore there is no exact calculation for the amount each month depending on how much profit the bank gets in that month. Whereas conventional banks themselves have an interest every month and are clearly given by all customers.

- From the aspect of Pinjma and Credit

At Islamic banks when going to credit have a partner system until there is a loan program whose amount remains in accordance with the agreement agreed between the bank and the customer. In conventional banks, the percentage of interest given does not change either when the credit is bad or not, then they have a penalty system if the debtor cannot pay the installments on time

Which is More Profitable for Sharia Banks Or Conventional Banks? 

From the explanation of the differences between Islamic banks and conventional banks along with the examples above, you can conclude that both types of banking are both Islamic banks and conventional banks although both have the same goal of benefiting their customers, but clearly, both have advantages and disadvantages of each.
Which is better all depends on your goals as a customer. For those of you who so far have no objections to the dude system, and want to make a profit every month called the fixed rate of all deposits that you give in the bank. 

For those of you who want to apply for a loan with a clear percentage of interest each month even though you have to face penalty risk, then a conventional bank is your right choice. For those of you who consider Islamic sharia rules able to get you peace when banking transactions, you can choose the type of sharia bank. 
Even if you don't use the interest system, the profit you get every month depends on the profit and loss of your Islamic bank for that month. 
We reiterate that whatever the differences between Islamic banks and conventional banks, both types of banks have the intention to provide benefits to their customers despite the different forms and sources. 
Profitable or not for you, all depends on your interests when banking transactions. For this reason, consider carefully choosing the best type of bank from the different functions of Islamic banks and good conventional banks. Do not let you later choose the wrong bank that is not in accordance with beliefs. 
Because the convenience of saving/borrowing or the like is also adjusted to your own desires. So that all can provide benefits and advantages. Therefore, make sure in depth.