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IslamicbankscollectfundseitheronqardbasisoronMudarabahbasisThepresentstudyisconductedtofindoutthedifferencebetweenthetwoareasof banking,thatis,Islamicandconventionalbankingwithrespecttoprofitability,efficiencyandDifferencesbetweenIslamicBankingandConventionalBanking OfferingsApplyingdifferentmethodologiesonthedatathatspantheperiod–,thisstudydocumentssignificantdifferenceswithrespecttotheperiod,countries, andperformanceAAwanWhilewefindthatIslamicbanksaremorecost-effectiveinalargesampleofcountries,thisadvantageturnsaroundwhenwefocuson asampleofcountrieswithbothconventionalandIslamicbanksKEYDIFFERENCESPublishedEconomics,BusinessConventionalbankscollectfundsondebt basisandadvancemoneyondebtbasis,charginginteresttocustomers,astheirprofitDailyUpdatesoftheLatestProjects&DocumentsDETAILSThispaper discussesIslamicbankingproductsandinterpretstheminthecontextoffinancialintermediationtheoryThispaperaimstomakeacriticalsynthesisofseveral articlestoidentifyboththeconvergencesandthedivergencesbetweenresearchersonthequestionofstabilityandefficiencyofIslamicTherstmod-ernexperiment withIslamicbankingwasestablishedinasmalltowninEgypt,calledMitGhamr,in, InIslamicbankinginterestisprohibited,itisasset-basedfinancingwhere thetradeofelementsisnotpermissiblebyIslamAttheendoftheperiod,theactualprofitearnedisdistributedtothedepositorsAsfromthedefinitionitself,there aredifferencebetweencommercialbankandIslamicbankConventionalbanksacceptdepositsonthebasisofloanforalltypesofdepositaccountsincluding TermDeposit,SavingsandCurrentsaccountsCASA&TermDepositconventionalbanking:businessmodel,efficiencyandstabilityCASA&TermDeposit ConventionalBankingisbasedontheMan-madelawsandthebankingsystemisprofit-orientedUnderthearrangement,theBankmanagesCustomer’sfundsina commonpoolandthecustomerisprovidedwiththeexpectedratethatthedepositwillachieveItisnotbasedontheSharialawsbutisEuropeanResearch StudiesJournalVolumeXX,Issue2A,ppLiquidityRisk:ComparisonbetweenIslamicandConventionalBankingKharisyaAyuEffendi1DismanDisman2 Abstract:ThepurposeofthisstudyistoanalyzetheinfluenceofmicroofconventionalandIslamicbanks,wefindlittlesignificantdifferencesbetweenthetwo groupsSeeMoreDepositLiabilitiesIntheory,however,IslamicandconventionalbankingdifferinimportantwaysWhileconventionalbanks’(CBs) intermediationislargelydebt-basedandallowsforrisktransferJournaloftheKnowledgeEconomy()–IntroductionTheideaofinterest-freebankingwas introducedinthelateofsDepositLiabilitiesDocumentDetailsInterestbasedreturnsareprovidedforIslamicvsIslamicBankingisgrowingwithfastspeedall overtheworldparticularlyinPakistanwhiletheconventionalbankingisADCBIslamicBankingacceptsdepositsbasedonaninvestmentagency(Wakala)ora partnership(Mudaraba)CommercialbankprovidestransactionalandsavingsaccountsandacceptstimedepositswhileIslamicbankingreferstoasystemof bankingorbankingactivitythatisconsistentwiththeprinciplesof6transformation,apaymentsystem,custodialservices,andriskmanagement(VanGreuningand Iqbal,)ThepurposeofconventionalbankingistomakemoneythroughinterestAlso,thereturntheygivetodepositorsisRiba(Interest)asit’sabenefitonQard (debt)SUBSCRIBETOEMAILALERTS