ISSN: 2278-4853 Vol 6, Issue 9, September 2017 Impact Factor: SJIF =4.708 TRANS Asian Research Journals http://www.tarj.in 105 Asian Journal of Multidimensional Research (AJMR) (Double Blind Refereed & Reviewed International Journal) UGC APPROVED JOURNAL COMPARATIVE STUDY OF INCOME AND COST EFFICIENCY OF ISLAMIC AND CONVENTIONAL BANKS OF BAHRAIN Iqbal Thonse Hawaldar*; Abdelrhman Meero**; Habeeb Ur Rahiman***; Rajesha T M**** *Associate Professor, College of Business Administration & Assistant to the President for Accreditation and Quality Assurance, Kingdom University Bahrain. Email id: i.hawaldar@ku.edu.bh **Associate Professor, Department of Finance and Accounting, Dean, College of Business Administration, Kingdom University, Bahrain. Email id: a.meero@ku.edu.bh ***Faculty, College of Business Administration and Member of Accreditation and Quality Assurance, Kingdom University, Bahrain Email id: habeeb.udy@gmail.com ****Institutional Measurement Administrator, Accreditation and Quality Assurance Office, Kingdom University, Bahrain. Email id: rajeshtm550@gmail.com _____________________________________________________________________________ ABSTRACT The development of service sector is crucial in contributing to the GDP of any nation. The banking system plays an important role in the development of a country. The commercial banking system dominates the financial sector by dealing with the majority of financial transactions of a country. The existence of Islamic and non-Islamic banks has contributed for the development of the economy. Commercial banks in Bahrain consist of interest-based conventional banks and interest-free Islamic banks (based on Islamic sariah). The performance