Islamic banking is a banking system guided by the principles of Islamic laws (Sharia). In Islamic banking, the most important feature is prohibited interest (Riba), regardless of the form or source. Riba is the fixed increase in capital, collected over a pre-established period. According to the Quran, in all types of transactions, it is forbidden to receive and pay interest. Persons who are in the business of lending money under three conditions which are addition of principal amount or principal, increase of additional amount fixed in advance and negotiation subject to the two clauses mentioned are considered as Riba transactions. It does not matter whether it is a personal need or a useful purpose or whether the borrower is poor or rich. However, surcharges for late payments and trade financing fees are allowed. The Riba ban is to avoid unbalanced distribution of income in society if interest is involved in the credit system. Risk sharing is another principle of Islamic banking. Although interest is prohibited in Islamic banking, they can still operate under the profit and loss sharing concept using risk funds. When there is no guarantee of return, people will be encouraged to maximize their effort to contribute with justification to the production process. Mudarabah and Musharakah are two types of forms which are more desirable in the concept of profit and loss sharing. In these two forms, the financier makes the funds available as an investor rather than a lender. The funds they invest do not guarantee that they will bring them income, they may have to share the loss in proportion to its share. Under Mudharabah, two parties will be involved who are… in the middle of the paper… creditor and debtor. However, regardless of the type of relationship the customer has with an Islamic bank, his relationship will never be that of debtor and creditor. For example, according to Mudharabah basic, the relationship between a bank and a customer is only investor and entrepreneur. Furthermore, when making investments in conventional banks, for example making savings in a conventional bank for a certain period, the bank must guarantee all its deposits upon maturity, regardless of the bank's loss of money in case of unexpected business failure. However, for Islamic bank, if based on al-wadiah principle, Islamic bank will only guarantee deposits for all deposit accounts but if according to mudharabah principle, the customer must share the loss if there is a loss. Therefore, both Islamic and conventional banks operate totally differently, although the service they provide is almost the same.