Special Features
The difference between Islamic and conventional banking
Because the UAE is a Muslim nation, there are both Islamic and conventional banking institutions available here. For those familiar with a conventional banking system what they need to understand is that the foundation of an Islamic bank is based on the Islamic faith and must therefore stay within the limits of Sharia law.The main principles governing this are the absence of interest-based transactions, the avoidance of any economic activities that might involve oppression or speculation and the discouragement of any production of any goods or services that might contradict the religion.
While both systems offer the same financial products to customers, how they profit from that relationship differs. In Islamic banking all forms of interest are forbidden; instead the bank and the consumer divide the profits between them hence why an Islamic bank will talk about a profit rate rather than interest rate.
Both forms of banking are open to expatriates. Both Islamic and conventional banking offer competitive financial products so comparing the options could change your mind about where you want to deposit your income every month and which bank you want to take a credit card from.
