Major Fundamental Differences between the Islamic Bank and the Traditional Bank

 

No.

Elements of Comparison

The Islamic Bank

The Traditional Bank

1

Establishment

Legitimate principle to clean the Banking business off  usurious interest and legitimate irregularities

.Personal materialism  tendency to deal in cash and maximize wealth

2

Understanding

Financial Banking institution accepts money on the base of abscesses security and pay on profitability for trading and investing according to sharia intensions and detailed rulings  

One of the cash monetary market which deals in cash credit and it’s  principle work thru accepting deposits to be used in banking operation such as commercial document discount and buying and selling and loans offering and other credit operations  

3

Nature of role

Not a neutral mediator role neutrally but practiced the profession of banking Brokerage investment tools where a salesman and a buyer and a partner.

Intermediate financial institutions between  the savers / the depositors and the investors.

4

Financing Base

It is based on the production base according to the  principle of profit and loss

It is based on the principle of borrowing with an interest rate

5

Client's Characteristics   

- current account holder based on Al-Hassan(good) loan and secured pay.

-Investment account holder he is a money lord.

-Buyer/seller- renter/tenant in all Hala(legitimate) sales

- Partner

- Depositor and savor thus he/she is a lender and a creditor or a borrower an a debtor all based on interest.

- A renter of some banking services like safe deposits boxes  

6

Prohibited and permissible

Permissible to practice commerce and industry and goods ownership and buying of real-estate and trade in the commercial companies stocks according to Shariaa regulations

-prohibited from exercising commerce and industry.

-prohibited from buying real-estate other than what is needed for exercising his business.

-permissible for him to buy  for his own other commercial companies stocks  within fixed percentages from his own funds or in prior Central Bank approval.

7

Personal financial resources

May issue  public and private investment instruments in a project or a certain sector

May issue preferred shares

8

External financial resources

Investment account on the basis of absolute speculation or restricted speculation.

And  agencies in investment absolute or restricted.

Deposits and loans on the basis of interest

9

Money usages

The Majority of funds will be financed on the basis of Islamic financing formats of selling and partnerships and speculations and others.

The majority of funds is used in lending with interest.

10

Main Duties

Speculator in absolute    speculations considering all depositors are money lords.

And the money lord and business owners(investors) are speculator in exercising his activities. 

 

Basically and normally accepts deposits and offer loans for others based on interest. 

11

Saving and savings awareness

Saving is post ponding urgent spending to a later time thus it's a behavioral process that is why the Islamic bank seeks funds with all individuals rich and poor and cares about in the development of savings awareness for all for their own motives.  

According to the implemented theory saving is the surplus from income after consumption that is why the traditional bank seeks funds with the rich at the expense of the development of the savings awareness with all individuals in generals  

12

Trading on property

Based on funds investment and trading with it according to sharia formats and tools

Based on the lending only according to the interest rate to accomplish returns

13

Profit

 

Applied by legitimate causes such as: funds- business –collaterals  according to the legitimate standards

It is checked from the difference between the payable and relievable interest in the bank operation

14

Loss

Borne by the bank if he is the money lord in speculation, The capital is estimated in partnerships

Borne by the borrower alone even if he has nothing to do with reasons

15

Elements of granting credit

 The relative importance of the client personality is more.

Attention to the productive capacity and the nature of its work and activities carried out by the mechanism in practice more.

The relative importance of the collaterals is more.

Attention to the capital and the production capacity is less.

16

Monitoring

Three types of monitoring: the Shariaa monitoring, and by the General Assembly and the auditor, and the monetary authorities

Two types of monitoring: from the general assembly and the auditor and the monetary authorities

17

Zakat fund

One of the pillars in applying the Islamic economical curriculum and social solidarity thus it's one of the strong benefits of competition

Has no Place in it

18

Shariaa purposes and priorities

The most important determinants mechanism of work and exercising activities

Has no place in it even if there was some agreement  which partial

Contact us

Main Branch - Al Najmeh Square

Tel. : 00963-11-33919

Call center :00963-11-9398

Fax : 00963-11-3348731

P.O. Box: 33979 D

 

About us

Cham Bank, private bank in the charter of a Syrian Joint stock company, Was established on the 7th of Sep 2006 With a capital of 5 Billion Syrian Pounds (100 million USD) and registered at the Commercial Register under No.14809 dated January the 24th 2007(the 5th of Muharram 1428), and registered at the Syrian Central Bank under No. 15.

Cham Bank is the first Islamic bank in Syria to take the Islamic Sharia approach. The Bank s operations and activities (With Keeping customer’s names anonymous) are subject to the Central bank of Syria and the Islamic committee monitoring.