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Difference between conventional bank account and an Islamic bank account.

05/08/2022

I am sure you have often seen that banking services are divided into conventional and Islamic banks, such as conventional savings accounts and Islamic savings accounts, conventional credit cards and Islamic credit cards, conventional time deposits and Islamic time deposits, etc. But do you know the difference between conventional banks and Islamic banks?

An Islamic Bank is a bank that conforms to the Shariah, whereas a Conventional Bank is a bank that does not have to conform to the Shariah. The mainstream banks in the country are divided into conventional banks and Islamic banks, which have the word Islamic or the letter -i.

Maybank’s Islamic business is called Maybank Islamic, while Hong Leong Bank’s Islamic business is called Hong Leong Islamic Bank and Public Bank’s Islamic business is called Public Islamic Bank.

So the question is, can Chinese people hold an Islamic Bank Account, an Islamic Credit Card or an Islamic Fixed Deposit? The answer is yes, you can.

There are two main differences between conventional and Islamic banks, namely that Islamic banks do not deal with companies that are not in line with Islamic principles, such as the gambling industry, alcohol, etc. Islamic banks also do not allow “interest”, which is uncertain in Islamic terms, so they use “Profit” instead.

The terms of use of Islamic banks clearly state that the services provided by the bank (including credit cards) cannot be used for transactions in nine categories, such as alcoholic beverages, cigars, funeral services and crematoria, dating services, betting (lotteries, casinos, illegal betting or wagering), government-run lotteries, online casinos, horse or dog racing, etc.

If you do not want to be subject to these restrictions, then remember to choose a conventional service when you open a bank account or apply for a credit card.

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