A COMPARISON OF THE TRADITIONAL (WESTERN­ STYLE) BANK AND ISLAMIC BANK MODELS

*Muhammad A Adnan -  Universitas Islam Indonesia, Indonesia
M.J.R Gaffikin -  Universty of Wollongong, Australia
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Language: EN
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Abstract

There has been a remarkable in­crease  in the number  Islamic banks and Islamic  Financial  Institution since  the  1970s.   There are  about a hundred Islamic Banks and Financial Institutions currently in the world. It is useful and interesting to know how Islamic banks  differ from  the  West­ern (Traditional)  style  bank?
This paper surveys the  differ­ences  between  the two­style  of bank. A comparison is made  of the origin of each style of bank.  their develop­ment,  the types of products and ser­vices  they  offer:  their organization and their financial statements.
The paper concludes that the ba­sic  difference  is in the  treatment  of interest.  But this in tum generates some other differences.  Interestingly, in the sense  of accounting concepts and practices,   it  seems that   both styles are  not significantly different.
However. a close examination of this seems  to be interesting and is the fo­cus  of study,  because  each  style  of bank  has  developed with  different perspective.

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