Interest Free Banking in Pakistan MCQs

What is the primary principle underlying interest-free banking?

A) Profit-sharing

B) Risk-sharing

C) Interest accumulation

D) Loan disbursement

Which regulatory authority oversees interest-free banking operations in Pakistan?

A) State Bank of Pakistan (SBP)

B) Securities and Exchange Commission of Pakistan (SECP)

C) Federal Board of Revenue (FBR)

D) Competition Commission of Pakistan (CCP)

What is the primary financial instrument used in interest-free banking for asset financing?

A) Murabaha

B) Musharakah

C) Ijarah

D) Istisna

Which Islamic banking mode involves profit-sharing between the bank and the customer?

A) Mudarabah

B) Salam

C) Takaful

D) Wakalah

What is the key difference between conventional banking and interest-free banking?

A) Use of profit instead of interest

B) Lower transaction fees

C) Higher interest rates

D) Limited customer base

Which type of financing mode involves cost-plus financing?

A) Musharakah

B) Ijarah

C) Murabaha

D) Istisna

What is the concept of “Riba” in Islamic finance?

A) Interest

B) Profit-sharing

C) Risk-sharing

D) Asset management

Which Islamic banking mode involves leasing of assets?

A) Murabaha

B) Musharakah

C) Ijarah

D) Istisna

What is the primary purpose of Islamic banking in Pakistan?

A) Promote interest-based lending

B) Provide financial services in compliance with Shariah law

C) Offer higher interest rates to customers

D) Limit banking services to specific communities

Which Islamic banking mode involves partnership and profit-sharing?

A) Murabaha

B) Musharakah

C) Ijarah

D) Istisna