Who should attend
This is a comprehensive program designed to give delegates an all-round understanding of the issues involved in Risk management for Islamic banking.
The course specifically targets:
Corporate and Commercial Bankers
Risk Management Managers
Auditors and compliance professionals
About the course
It is widely accepted that Shari’ah banking model is one of the fastest growing areas of international Banking & finance. Estimated, that there will be more significant growth development over the next five to ten years. On the other hand Risk management is also another area that every banking industry has to attend to, Islamic banks are not different.
The course is designed for participants seeking an in–depth understanding of the Shari’ah Risk Management. The course sets out the Concept of Risk management in Islamic Banking and then moves on to the practical aspects of applying it with demonstrations from case studies and interactive exercises throughout the program.
## Course Objectives
By the end of the course, participants will be able to:
Understanding how Islamic banks work and the kind of risk they are exposed to
Discussing the criteria of risk management from Shari’ah point of view
Looking into the Shari’ah-intrinsic techniques of risk management
Studying the Basel II proposals of risk mitigation and how should they apply to Islamic banking
Understanding the methodologies of calculating capital adequacy in Islamic banks as proposed by ISFB
Discussing processes of monetary authorities’ supervision on Islamic banks
## Course Outline
Islamic Banking in today’s World
Islamic Law and finance
Why Islamic Finance?
Growth of Islamic Banking
Regulating Islamic bank
Islamic Banking relation with Central banks
Islamic banking centers
Assets of Islamic banks
Risks in Islamic banks
The nature of Islamic finance and risks involved
Risk implications of the prohibition of interest
Credit risk in Islamic banks
Operational Risks in Islamic banks
Market risks in Islamic banks
Other risks: legal, withdrawal, hari’ah confidence, litigation, etc.
Are risks in Islamic banks different from conventional banks?
Comparison and contrast of risks in Islamic banks and risks in conventional banks
Risks addressed by Basel II and IFSB
Operational Risks, and
Trading Book Risk
Risk Mitigation: kinds and effect on calculation of capital adequacy
The three Pillars of Basel II Accord
Supervisory Review Process
Monetary authority supervision. Does it make a difference between Islamic
Banks and conventional banks?
Market disclosure in Islamic banks: a serious administrative-cum-political problem!
Managing risks in Islamic banks
Establishing risk management environment, policies and procedures
Maintaining processes of risk measurement, mitigation, and internal monitoring and control
Shari’ah-Intrinsic risk mitigation techniques
Revenue sharing contract
Revenue sharing and Revenue Sharing Sukuk
Service and usufruct-based finance
Third party guarantee: deposit guarantee
Reverse Murabahah and Murabahah line of credit
Bundles/packages financing: applying the majority rule
Hedging through options
Principal insurance and collaterals
Management processes and techniques of specific risks
Credit risk management
Interest rate risk management
Liquidity risk management
Operational risk management
Risk adjusted rate of return on capital (RAROC)
Sensitivity of Islamic banking operations to Basel II proposals
Financial intermediation in Islamic banks and the myth of two-tier Mudarabah
Traditional conservatism of Islamic banks (worry about the idea)
Islamic Financing Modes and Practices Sensitive to Basel II Proposals:
Debt-creating Islamic modes of financing
Non-debt crating Islamic financial modes
The effect of restricted deposits, unrestricted deposits and deposits in current accounts on credit and other risks’ exposure in Islamic banks
Importance of capital adequacy in the banking industry
Basel II proposals for the calculation of capital adequacy in conventional banks
Capital adequacy in Islamic banks: The issue of last resort
Importance and Calculation of credit Risk
IFSB Standard on credit risk in Islamic banks
Methodologies of credit risk calculation
FSB Standard on operational risk and its calculation ** **IFSB Standard on market risk and its calculation
Calculation of Minimum Capital Requirement in Islamic banks, Theory and reality!
Videos and materials
Because of COVID-19, many providers are cancelling or postponing in-person programs or providing online participation options.
We are happy to help you find a suitable online alternative.