IntroductionThe coexistence of conventional banks and Islamic banks provides an exceptional platform to compare Islamic banking practices with those of conventional banking practices. It is well known that Islamic banks differ from conventional banks in that they do not deal with interest (Riba), i.e. usury, which is totally prohibited in Islam. In other words, banks are not allowed to charge an interest rate on loans given to customers. The concept considered in Islamic banking is Profit and Loss Sharing (PLS) which is based on profit sharing and joint venture which goes hand in hand with Islamic Sharia law. In fact, PLS adapts the integration system in which borrowers share the profits and losses of banks with their depositors (Khan and Mirakhor, 1990). To some extent, Islamic banks are much better than conventional banks in the sense that borrowers and depositors share their profits and losses with each other. Adapting the PLS paradigm can enable borrowers to obtain long-term loans on their projects, leading to a boom in economic growth (Chapra, 1992) and (Mills and Presley, 1999). The privilege of the PLS paradigm is to distinguish good customers from bad ones since PLS requires searching for more potential customers. This could require banks to closely control and monitor their investments and borrowers to ensure their capital is invested properly and efficiently. To this end, the main advantage of the PLS banking system is the allocation of capital which depends on the productivity and quality of the projects financed (Khan, 1986). Islamic Banking System in Jordan The Islamic banking system emerged in Jordan at the end of the seventieth century. Looking at the Jordanian banking system, we could find that it is not Islamic in which only four I...... middle of paper ...... are expanded. Additionally, both banks were able to finance projects in Jordan. Also, these banks have increased their efforts on financing short-term investments. Finally, these banks have grown and established themselves through market transactions and facilities. Siraj and Pillai (2012), in their study on “Comparative Study on the Performance of Islamic Banks and Conventional Banks in the GCC Region”, studied the functioning of six Islamic banks. and six conventional banks in Arab League countries between 2005 and 2010. They assessed the operating expenses, assets, operating income and deposits of these banks. They found that the tested Islamic banks had higher return on assets (ROA) and return on equity (ROE). ) than conventional banks, taking into account the speed of development of the operating profit of Islamic banks, it was also higher than that of conventional banks..