Fida Hussain.docx - Fida Hussain 41926 Mid-Term...

Fida Hussain (41926)
Mid-Term Summer-2021
Department of Business Administration
Subject: Islamic Banking and Finance Submission Day: Wednesday
Instructor: Muhammad Rizwanullah Submission Date: 4
th
August
Program: BBA Max. Marks: 25
Please follow the instructions carefully:
1. Write your answers directly on the Black Board (recommended) or upload word file
before the due date on Blackboard.
2. Write your name and registration ID on the first page of your Word file.
3. Answer scripts can only be uploaded on Blackboard only during the submission time.
4. To avoid any unforeseen problems, you are advised to follow the Guide lines
communicated by the Faculty Members.
5. Submission of answer copy(ies) will be considered acceptable through Blackboard only.
Therefore, do not submit your document through email or any other medium.
6. Use 12 pt. font size and Times New Roman font style along with 1-inch page margins.
7. Follow the requirements of the word limit and the marking criteria while writing your
answers.
8. Provide relevant, original and conceptual answers, as this exam aims to test your ability to
examine, explain, modify or develop concepts discussed in class.
9. Do not copy answers from the internet or other sources. The plagiarism of your answers
may be checked through Turnitin.
10. Double check your word file before uploading it on BlackBoard to ensure that you have
uploaded the correct file with your answers.

Question No.1 06 Marks
Differentiate between Islamic and Conventional banking system
Differences between them mainly revolve around the fact that Islamic banking is a Shariah based
economy while the conventional banking is usually based on financial laws made by us.
Conventional banking is especially interest based while the Islamic banking focuses on
profit that's interest free and promotes an economy within which Shariah is taken into account the
law thus the divine rules set are followed by people while conventional economy makes up their
own rules and follow them, they permit give and take of interest as their profit is
principally supported it whether or not the people have gotten thinnest of benefits. Islamic banking
motivates people to earn profit mostly by advantaging others while the conventional banking
allows interest for gaining advantage even if someone is disadvantaged. Islamic banking also
focuses on benefiting the people instead of taking them in loss thus all haram stuff is
prohibited during this system like paying or even taking interest and other prohibited acts like
usury and gambling are forbidden in Islamic banking unlike the standard banking as they only
focus on their own profit and allow it in their system. The features of risk management, risk
sharing, and profit or loss are dissimilar for both banking systems because the Islamic banks share
the aspects fairly and equally between all parties. The Islamic banking also concentrate on the