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.