Advantages And Disadvantages Of Islamic Bank

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4.0 ADVANTAGES AND DISADVANTAGES OF CONVENTIONAL AND ISLAMIC BANKS
4.1 Advantages and disadvantages of conventional bank
The advantages of the conventional bank are the source of income is not restricted. For example, if you have a legal gambling lottery ticket business, you would be allowed to apply for conventional banking products. Also, the conventional mortgages could lead to more savings. For example, if the individual wishes to increase the loan amount on a property, there would only be an additional stamping fee levied, without having to draw up a new agreement. Unlike Islamic bank, if you want to increase the loan amount, a new agreement is required. If such situation arises, choosing conventional mortgage could lead to more savings.
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This is due to the high interest rates. However, Bank Negara Malaysia has regulations in place to manage the fluctuations of market rates to safeguard consumer interests.
4.2Advantages and disadvantage of Islamic bank
The advantages of Islamic bank include there are no changes experienced on monthly commitments as it introduced a variable rate financing that has a maximum cap and this functions in protecting investment and to guarantee commitments do not surpass a specific amount.
The disadvantages of Islamic bank is the transactions need to be “halal” in nature. Which means, businesses that deal with alcohol, gambling, or any other type of “non-halal” products and services are prohibited. So, unlike the conventional bank, the source of income is

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