A major distinction between a conventional bank and an Islamic bank is that Islamic banks
A)are allowed to charge higher interest rates on loans.
B)cannot accept private deposits.
C)cannot pay or charge interest.
D)are not subject to any form of law.
E)are supposed to refrain from making a profit through any source.

Question

Quizplus · Accepted Answer

Islamic banks follow the principles of Shariah law, which prohibits the payment or charging of interest (known as riba). Instead, Islamic banks generate income through profit-and-loss sharing arrangements, such as investment in equity or trade financing. Therefore, Islamic banks cannot pay or charge interest.

A Major Distinction Between a Conventional Bank and an Islamic