A Comparative Analysis of Investment Model between Islamic Banking and Commercial banking

Abstract

The report has been express a clear concept about the investment policy of IBBL as well as the commercial bank investment also. IBBL investment is fully different from commercial bank. IBBL main focus is that every activity will be done according to Islamic law. Every department is follow this rules, there is no vague concept or misinformation in these bank. In my shyamoli branch there has a three section such as general banking part, investment section and foreign exchange section. Every part do their job in clearly, and that’s why there is no money laundering report from islami bank. Bank employee’s morality is very good, they are much more decent, and their activity is performed according to Islamic shariah. Although I have worked experience in every section but investment department is more important for me because it’s my report topic which is assigned by internee supervisor my honorable faculty. Islami bank investment is divided by three modes bai modes, share modes, and ijara modes. Every modes has a various classification. Every modes has done their work by following Islamic rules. We all know that islami bank avoid interest or (riba), even so interesting fact is that last few years its profit is high than others bank. Islami bank run their business in an ethical way, and they cannot charge extra profit. They always conduct their business by follow sharing profit loss method. Sometimes they provide capital, and client provide their labor, again financial situation and client invest in a percentage basis sixty forty, or eighty twenty and so on and they share their profit and loss on a pre-agreed contract.

On the other hand in conventional banking system there is some investment method such as: ownership market, stock, bonds. Real state precious objective, lending investment, CDS, TIPS and so on basic rules, such as: they take an interest on principal amount, after taking interest again they charge on total amount. Although islami bank concept is different in this case. Islami bank take a profit on deducted amount. In conventional banking system depositors get some advantage but who take a loan he faces various types of problems, fall into a frustration. And at last he is become very poor. As conventional bank take an interest so there is a various types of problem has seen in social and economic life. High interest rate is harmful for consumers, at the end of the time they become helpless. We all know that inflation is increases for prefixed price of goods and services. There are many harmful activities occur in our economic life for inflation increases. For example if inflation increases businessman raise their product price, again financial institution also accused extra percentage, as a result marginal goods will lay down. It is also causes for unemployment.