Research Paper (undergraduate) from the year 2012 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, , course: Business economics - Banking, Stock Exchanges, Insurance, Accounting, language: English, abstract: Main objective of this paper is to study the basic concepts of Islamic banking and analyze the working mechanism of both types of structures (Islamic and Interest based) along with the possibility of Risk factors in both model. This paper also shows the basic differences between Interest and Islamic based banking system in terms of profit earning function.