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

Question

Quizplus · Accepted Answer

Islamic banks operate under the principles of Islamic law, which prohibits the payment and charging of interest (riba). Instead, they engage in profit-sharing agreements with their customers, where the bank and the customer share the profits from a particular investment. As such, Islamic banks cannot pay or charge interest.

A Major Distinction Between a Conventional Bank and an Islamic