Presentation On: Comparison Between Islamic Banks and Conventional Banks
Presentation On: Comparison Between Islamic Banks and Conventional Banks
Presentation On: Comparison Between Islamic Banks and Conventional Banks
On
Comparison Between Islamic
Banks And Conventional Banks
Introduction
Background of the study Objective
A bank is an economic institution whose main aim is to earn
profit through exchange of money & credit instruments. It is
service oriented as well as profit oriented organization.
Islamic bank works under the Islamic Shariah rules. Shariah
rules basically follow the partnership based banking where
conventional banks follow the interest based banking system.
The main difference between Islamic banks and conventional
banks is the exclusion of interest.
banksTo make an experimental analysis on investment, five years comparative analysis is done
among two Islamic banks and two conventional banks on the basis of division wise, mode
wise and sector wise. These are briefly discussed below:-
Mymensingh
500
Rangpur
Sylhet
400
Barisal
300
Rajshahi
200
Khulna
Chittagong
100
Dhaka
0
IBBL
FSIBL
PBL
DBBL
This figure represent that IBBL invest highest in Dhaka division and PBL and DBBL make
highest investment in the same division. In contrast, FSIBL invest highest in Chittagong
division. Moreover, investment of these banks in other division is low as compared with the
Dhaka division and the Chittagong division.
Term deposit
Savings deposit
200
Current deposit
100
0
IBBL
FSIBL
PBL
DBBL
This figure represent that IBBL has highest deposit in Savings Deposit and
FSIBL has highest deposit in Mudaraba Savings Deposit. On the other side,
PBL and DBBL contains highest amount of deposit in Term Deposit .
sample banks.
16
14
12
2011
10
2012
2013
2014
2015
2015
2014
2013
0
IBBL
2012
FSIBL
PBL
2011
DBBL
This figure represent that IBBL has highest capital adequacy ratio in year 2014. FSIBL has
upward trend in capital adequacy ratio in year 2011-2015. On the other side, PBL represent
highest capital adequacy ratio in year 2015. And DBBL has highest capital adequacy ratio in
year 2015.
Conclusion
This study was basically based on the trends of investment, deposits and capital adequacy ratio of respective
Islamic banks and conventional banks in Bangladesh. This report presents that Islamic banks tried their best to
maintain Islamic Shariah but they faces many difficulties to keep up Islamic principles and conventional banks tried
to maintain their interest based banking principles. There are some issues related to the topic comparison between
Islamic banks and conventional banks, these are given belowIn division wise investment, most of the investments in Dhaka division and then Chittagong division compared to
other divisions. In Barisal division, Sylhet division and Mymensingh division contain small portion of investments.
In mode wise investment, IBBL and FSIBL invest highest in Bai-Murabaha is compared to others. In FSIBL
investment in Bai-Murabaha is decreasing in trend year. On the other hand, PBL invests highest in Secured loan
and DBBL has highest investment in Cash credit.
In sector wise investment, IBBL has highest investment in Trade and Commerce, FSIBL has highest investment in
Textile and Readymade garments. On the other hand, PBL has highest investment in Industrial loan and then
commercial loan, DBBL has highest investment in commercial loan and then Industrial loan compared to other
sector.
Islamic banks has largest portion of deposit in Mudaraba Savings Deposit and conventional banks has largest
Recommendations
Both Islamic banks and conventional banks invest highest in Dhaka division and then
Chittagong division. So, every bank should invest more on the other divisions.
Islamic banks should invest more on Agriculture sector since our country is an
agricultural country. And Islamic banks also invest more on garments sector because this
is growing sector. Conventional banks should invest more on Industrial loan sector
because this sector covers most of the sectors in Bangladesh.
Islamic banks have more savings deposit, so they should try to increase their current
deposit and short notice deposit. Conventional banks have more fixed deposit than other
current deposit and savings deposit, so they should try to convince their customer to
increase their deposit.
All Islamic banks and conventional banks should try to increase their capital adequacy
ratio to improve their performance.
Finally, all of these banks should be careful about their investment sector.