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
What is the term used for Islamic bonds issued by banks?
A) Sukuk
B) Takaful
C) Wakalah
D) Rahn
What is the primary objective of profit-sharing in Islamic banking?
A) Encourage investment in risky ventures
B) Distribute profits among shareholders
C) Align banking activities with ethical principles
D) Maximize interest income
Which mode of Islamic finance involves pre-arranged sale contracts?
A) Istisna
B) Salam
C) Mudarabah
D) Wakalah
What is the purpose of Shariah compliance in Islamic banking?
A) Ensure higher profits for banks
B) Align banking practices with Islamic principles
C) Limit financial services to specific regions
D) Maximize customer deposits
Which Islamic banking mode involves agency and trusteeship?
A) Mudarabah
B) Wakalah
C) Salam
D) Takaful
What is the primary source of Islamic banking regulations in Pakistan?
A) Federal Reserve Bank
B) State Bank of Pakistan
C) Securities and Exchange Commission
D) Ministry of Finance
Which type of contract in Islamic finance involves future delivery of goods?
A) Murabaha
B) Istisna
C) Mudarabah
D) Musharakah
What is the role of a Mudarib in Islamic finance?
A) Investor
B) Borrower
C) Manager
D) Customer
Which Islamic finance mode involves mutual assistance among participants?
A) Takaful
B) Rahn
C) Wakalah
D) Salam
What is the key feature of Islamic banking related to interest payments?
A) Interest-free loans
B) Fixed interest rates
C) Profit-sharing
D) Variable interest rates
Which type of financing is used for short-term agricultural production in Islamic banking?
A) Murabaha
B) Istisna
C) Salam
D) Musharakah
What is the primary principle behind the concept of Musharakah in Islamic finance?
A) Profit-sharing
B) Fixed returns
C) Interest accumulation
D) Loan repayment
Which Islamic finance mode involves leasing of assets with a purchase agreement?
A) Ijarah
B) Murabaha
C) Musharakah
D) Istisna
What is the primary role of Shariah boards in Islamic banking?
A) Set interest rates
B) Ensure compliance with Islamic principles
C) Manage investment portfolios
D) Provide customer service
Which Islamic finance mode involves depositing funds for safekeeping?
A) Rahn
B) Takaful
C) Wakalah
D) Murabaha
What is the primary role of a Murabaha contract in Islamic finance?
A) Profit-sharing
B) Cost-plus financing
C) Leasing of assets
D) Risk-sharing
Which Islamic banking mode involves collective risk sharing?
A) Takaful
B) Rahn
C) Wakalah
D) Salam
What is the key objective of the Islamic banking system in Pakistan?
A) Maximize interest income
B) Ensure financial inclusion
C) Implement interest-based lending
D) Promote profit-sharing
Which type of financing in Islamic banking involves a sale contract for future delivery?
A) Istisna
B) Mudarabah
C) Musharakah
D) Murabaha
What is the primary function of a Shariah-compliant savings account?
A) Accumulate interest
B) Ensure fixed returns
C) Avoid interest accumulation
D) Maximize investment profits
