Differences between Islamic banking and conventional banks Islamic banks1. The functions and operating methods of conventional banks are based on entirely man-made principles. 1. The functions and operating methods of Islamic banks are based on the principles of Islamic Shariah.2. The investor is guaranteed a pre-determined interest rate. 2. On the contrary, it promotes risk sharing between capital provider (investor) and fund user (entrepreneur).3. It aims to maximize profit without any restrictions. 3. It also aims to maximize profit but is subject to Shariah restrictions.4. It does not deal with Zakat. 4. In the modern Islamic banking system, it has become one of the service-oriented functions of Islamic banks to be a Zakat collection center and pay their Zakat.5. Lending money and receiving it back with compound interest is the basic function of conventional banks. 5. Participation in partnership activities is the fundamental function of Islamic banks. So we need to understand our customers' business very well.6. It can charge additional money (penalty and compound interest) in case of default. 6. Islamic banks do not have any provision to charge extra money from defaulting borrowers. Only a small amount of compensation and the proceeds are given to charity. Discounts are given for early settlement at the discretion of the Bank.7. Very often this causes the bank's own interests to become paramount. It makes no effort to ensure growth with equity. 7. Gives due importance to public interest. Its ultimate goal is to ensure growth with equity.8. For interest-based commercial banks, obtaining loans from the money market is relatively easier. 8. For Islamic banks, everything must happen on paper… through an overarching framework with checks and balances that include recognized responsibility for risk by businesses and independent oversight of risk management. The Group and the Bank mitigate operational risk by setting their key controls and assessments according to Citigroup and regulator standards. They are also evaluated, monitored and managed by its strong governance structure. The Group and Bank Self-Assessment and Operational Risk Framework comprise the Risk and Control Self-Assessment and the Operational Risk Policy and define the Group and Bank's approach to operational risk management. The objective of the policy is to establish a consistent approach to the assessment of relevant risks and the overall control environment within the Group and the Bank, to facilitate compliance with regulatory requirements and other corporate initiatives.