Why Do We Need Banks In Our Daily Life?

No country can survive without the presence of a bank. We can make online international transaction of import and exports through banks. The purpose of having banks in countries is that when foreign currency comes in our country, bank has all the records. We need to pay the taxes as per the money that we have in our accounts. We can’t carry cash in hand or keep money at home because the circumstances don’t allow us to keep money at our home. There are many benefits that banks give to the citizens of a country.

Types of Banking System:

There are basically two types of banking system in a country.

  1. Conventional Banking:

Conventional banking has been introduced long time ago throughout the world. It is practicing all around the world. Bank and internal relations with each other Some banks have branches in other countries which facilitates the account holder to get benefits even if they are not in their home country.

  1. Islamic Baking:

The concept of Islamic banking is completely different. The rules have been set according to the Shariah and the teachings of Islam. It is also called sharia banking Australia. These days, the presence of Islamic banking has been accepted worldwide and many banks has been opened that follows shariah banking.

Differ in Practices:

Both the systems have independent rules. They practice different school of thoughts. Following are a few main points where there is significant different in the system of both the banks.

Sharing of profit and Loss:

There is no concept of sharing of loss and profit for the investment in conventional banking. On the other hand, if a person invests in Islamic banking, he has to bear all the loses that the project will face. Same goes with the profit. If there is profit then each and every person will share the profit according to the percentage of their investment.

  • No Interest:

Conventional banking works and survive on the concept of interest. For example, if a person invests in saving scheme then he gets the interest on monthly of yearly basis. The percentage of interest is pre-set. He will get the money in the form of interest whereas there is no such thing as interest in Islamic banking. It is prohibited in Islam. According to Islam preaching, no one is allowed to give or take interest in any form.

The market of Islamic superannuation Australia has been growing drastically. The concept has been accepted worldwide and people are going towards Islamic banking rather than conventional banking. So, if you need more information about Islamic banking or want to own an account then feel free to visit our website www.hijafzs.com.au for further details.

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