Islamic Banks and Commercial Banks Performance Essay

Muslim Banks and Commercial Banks Performance - Essay useThis research will begin with the statement that conventional technical banks have a better hazard for increasing profitability and shareholders returns since they charge interest and fees on their customers. On the other hand, the Muslim banks have a lower opportunity cost for profit making and increasing the investors returns, because they operate on the principle of free-interest. Nevertheless, that is non to say that Muslim banks are not profitable. The low profitability and return on investment for the Islamic banks are largely accounted for by the fact that the Islamic banks operate on a more large-hearted basis than the conventional banks. Additionally, the commercial banks have a better grip on the economy of countries than the Islamic bank, since they have a long history compared to the Islamic banking, which is a contemporary phenomenon. The concept of Islamic and commercial banking has attracted a lot scholarly of attention of late, with different financial scholars trying to understand how the concept of Islamic banking works in relation to both Islamic banks profitability and Islamic banks customer behavior. The interest in studying this area has arisen out of the fact that the Islamic banks operate on the basis of the Islamic ghostlike laws, which is a totally different concept from the conventional banking operations. Defining the profitability of the conventional banks is more innocent because it is based on the banks charging interest rates and fees to their customers of different products and services that the banks offer to the customers.