Abstract:
This research incorporates the basic difference between Islamic and Conventional
banking system with the help of AL-Meezan bank and National bank of Pakistan. It also
incorporates historical background of the Islamic Banking, constitutional provisions,
methodologies, strategies to promote Islamic Banking, problems that are faced by the
system and their possible solutions as compare to conventional banks.
The prohibition of interest in Islamic economic system and I ts implementation in the
Economy. Analysis revealed by the progress and promotion of different Islamic banks
especially Al-Meezan Bank in Pakistan.
It has elaborately discussed over the ‘Critical review between two economic systems and
its loopholes’
It discusses chronologically the comparative analysis between Islamic and traditional
economic systems, and difficulties encountered in implementing the ‘Islamic economic
system’. This report also contains analyses of a traditional banking system and the basic
functions used by them, compared by the Islamic banking modes to handle these accounts
using the Shariah rules. It also gives role of the bank in a society. This report explains the
Musharakah and its different modes of finance and description of different ways to
operate in the current system.
Because the bank’s biggest business’s stakeholders are depositors, customers, and
shareholders. So it adopts those policies that benefices and are acceptable by all the
stakeholders, unless it does not contradicts with the regulations. Islamic Banking System
is planning to provide the alternatives to the bank’s traditional business activities
(conventional banking) under Shariah framework, such as trade, leasing, partnership
based arrangements, securities and other collaterals and guarantees.
