IslamicFinance.de

Many prospective banking customers cannot easily discriminate between the convential and the Islamic banking system. Despite this lack of clarity, the number of Islamic banks and Islamic banking counters of conventional banks have increased by the day. The question to ask is as to how exactly are they operating here and what models are they adopting in the presence of a well-established interest based banking system. Around 99 per cent Islamic banking in Pakistan revolves around lending and buy-back model and not even one per cent is based on profit and loss sharing. A physical asset is involved in deals. The real challenge for Islamic banks is how to cater to the borrowing needs of the government that are huge.