How is Islamic banking different from commercial banking?

The main difference between two is interest (Riba). Interest (Riba) in Islam is prohibited (Haram) in Islam. Therefore Islamic finance based on profit/loss sharing basis just like bussiness of Modern Corpoation based on Capital.

 

please see this link http://www.ijbssnet.com/journals/Vol._2_No._2%3B_February_2011/20.pdf

Islamic Banks have a Fatwa Committee in which all banks products and services need to approved as per Islamic or Share'ah