banking · 7 min read
Islamic Banking vs Conventional Banking
Islamic banking follows Shariah principles with profit-sharing and asset-based financing. Conventional banking generally uses interest-based models. Choose based on beliefs, product fit, and fees—not marketing alone.
Meezan BankFaysal BankIslamic
Last updated: January 15, 2026
Profit mechanism
Islamic products use profit-and-loss sharing or fee-based structures reviewed for compliance. Conventional products use interest rates on loans and deposits.
Financing and investments
Islamic financing uses structures like Murabaha or Ijarah. Islamic mutual funds screen securities for Shariah compliance.
| Area | Islamic | Conventional |
|---|---|---|
| Deposits | Profit sharing | Interest |
| Loans | Asset-based structures | Interest-based loans |
| Investing | Shariah-screened funds | All listed securities |