As most Muslims already know, interest has been deemed Haram by the Holy Prophet (PBUH), on the command of Allah, and by the Holy Quran. Conventional banks collect a large amount of interest and charge a specific amount of interest on every type of transaction that a person makes from the respective bank. Well, since Muslims are not allows to accept or give any money as interest, the Muslims who were conscious of what they are not supposed to do did not make any transactions with conventional banks and did not use conventional banking services at all.
As time progressed, Muslims grew aware of the need for banking services and decided that they really needed banking services that they could use. Islamic banking or religious banking is the concept that was introduced following this decision. Religious banking is a type of banking that is a polar opposite of conventional banking and does not involve anything that has been deemed Haram by the religion of Islam, meaning that religious banking does not require users to deal in any kind of interest and therefore is in accordance to all the rules that have been set by Allah through the Holy Quran and the Holy Prophet (PBUH).
Why is religious banking important to Muslims?
Religious banking is extremely important to Muslims and the reason why that is so is because Muslims, like all the other people, need to use banking services in order to either save money for certain “rainy days” or to make sure that they survive any “rainy days” whatsoever. If Islamic banking did not exist, Muslims would not be able to use banking services at all and that would be quite disadvantageous for Muslims since a majority of Muslims are dependent on banking services when it comes to surviving harsh times.
Can religious banking compete with conventional banking?
The only question that people ask when it comes to religious banking and its competition- conventional banking is whether religious banking can compete with conventional banking. Well, religious banking can and cannot compete with conventional banking. Are you a little confused?
Well, in terms of the rules and regulations that have been set by Allah through the Holy Prophet (PBUH) and the Holy Quran, Islamic banking can definitely compete with conventional banking. The reason why religious banking can compete with conventional banking terms of Islamic rules and regulations is because religious banking, unlike conventional banking, is in accordance to all the Islamic rules and regulations regarding banking and monetary matters such as loans and savings, among many other monetary and banking matters.
However, in terms of services and features, Islamic banking cannot at all compete with conventional banking. The reason why religious banking cannot compete with conventional banking in terms of features and services is because a large percentage of the services provided by conventional banks have been deemed Haram in Islam. Religious banks do not offer the services that are considered Haram or impermissible in Islam and that is the reason why Islamic banking lags behind conventional banking in terms or features and services.
What do you think? Can Islamic or religious banking compete with conventional banking?