Islamic Banking: Ijarah and Conventional Leasing

Abstract

The purpose of this study is to eliminate interest base system in financial institutions. As we know interest is prohibited in Islam so we are going to define permissible way of transactions under Islamic banking. Basic need of this project is to identify how we can run our business without involving interest in our transactions. I have intensive knowledge in Islamic Banking its transactions, what Shariah says about transactions and like that as well as we have command on conventional banking so we can easily understand what Shariah says about the transactions and what is right and what is wrong. The paper reveals their existing relationship between the Islamic banking and factors affecting in Ijarah and conventional lease.

Keywords: Ijarah and conventional lease