Islamic Banking and Finance has been growing rapidly during the last decades. Descriptive analysis has been used in order to introduce the Islamic banking and finance and how it works. On other hand, clarify the Islamic Banking and Finance Systems and show how it works in part of liability and also profit and loss sharing basis. In addition to that, the main similarities and differences were properly identified, introduced and discussed in the paper. It is obvious that there are many similarities between both systems while the major differences lies on the accepted and charged interests in loans provided by conventional banks since Islamic banks do not accept interest as it is prohibited by Islamic law. The paper also explained sufficiently the ability of Islamic banks to operate in Islamic and Non-Islamic populations’ countries. Over the last years, Islamic banks gained the trust of clients in Islamic countries as well as there was a real demand for such systems in non-Islamic countries. Monetary policies under Islamic banking systems has been also introduced and explained. As well as, what are the tools and techniques that were used in order to ensure stability for banks? Keywords: Islamic banking and Finance, Riba, Musharkah, Murabaha, Mudarabah, Islamic Monetary policy.
