DIFFERENCES BETWEEN ISLAMIC BANKS AND CONVENTIONAL BANKS

The paper compares Islamic and conventional banks in terms of their underlying principles, sources and uses of funds, risk allocation, governance and regulation, and summarises the empirical evidence on their efficiency and stability. The analysis shows that the key difference lies not in the range of services but in the contractual basis of financial intermediation: the prohibition of riba (interest) and the requirement that financing be linked to real assets and shared risk. At the same time, in practice Islamic banks rely heavily on debt-like contracts, which narrows the gap between the two models. The findings are discussed in the context of the introduction of Islamic banking in Uzbekistan.