Faculty of Business and Management Sciences · International Trade and Finance · Undergraduate
Course Objective
Course Description
The primary purpose of this course is to provide a reference point that represents the theories and practices of the major topics concerning risk management in Islamic financial institutions. It provides an overview of the evaluating and managing the various financial and business risks. Moreover, the course will shed the light on the Framework for Risk Analysis in Islamic financial system and Bank regulations.
Expectations and Goals
Upon successful completion of the course, the student should be able to demonstrate a basic understanding of concepts relating to risk management in Islamic financial institutions. Students are also expected to be able to identify and quantify the different Shariah, market, liquidity, credit, operational risks that an Islamic bank faces. The student is also expected to be able to identify the risks associated with the Islamic financial contracts and how to manage them.
Course Content
Week | Topic |
|---|---|
Week 1 | Introduction |
Week 2 | Overview of Islamic Banking Operations |
Week 3 | Concept of Risk and The Shariah Point of View on Risk |
Week 4 | Overview of Risk and Its Mitigation |
Week 5 | Risk in Islamic Banking Institutions |
Week 6 | Credit Risk in Islamic Banking Institutions |
Week 7 | Market Risk in Islamic Banking Institutions |
Week 8 | Operational Risk in Islamic Banking Institutions |
Week 9 | Midterm |
Week 10 | Liquidity Risk in Islamic Banking Institutions |
Week 11 | Other (Shariah Non-Compliance, Litigation, Displaced Commercial etc.) Risks in Islamic Banking Institutions |
Week 12 | Steps and Processes of Risk Management in Islamic Financial Institutions |
Week 13 | Banking Regulators (BASEL and IFSB) |
Week 14 | Risks in Mutual Funds and Takaful Operators & Their Management |
Required Resources
"Risk Management in Islamic Financial Instruments" - COMCEC Coordination Office, 2014.
Recommended Resources
(2015) RISK MANAGEMENT IN ISLAMIC FINANCE: AN ANALYSIS FROM OBJECTIVES OF SHARI’AH PERSPECTIVE, International Journal of Business, Economics and Law, Vol. 7, Issue 3
Course Learning Outcomes
- Identify the key risks existing within the Islamic Finance ;
- Describe the key factors that affect the financial risk;
- Evaluate and Apply the risk management methods in the current Islamic finance contract;
- Discuss the Risk mitigating instruments in Islamic Finance.
Core Area Distribution
Teaching Methods
Assessment & Evaluation
ECTS / Workload
| Activity | Quantity | Duration (h) | Total Workload |
|---|---|---|---|
| Course Duration (Including Exam Week) | 16 | 3 | 48 |
| Out of Class Study Period | 16 | 5 | 80 |
| Midterm | 1 | 1 | 1 |
| Quiz | 0 | 0 | 0 |
| Assignment | 0 | 0 | 0 |
| Practice | 0 | 0 | 0 |
| Final | 1 | 2 | 2 |
Course Schedule
| Week | Subject | Preparation |
|---|---|---|
| 1 | FINANCIAL INTERMEDIATION THEORY | Related part from the book |
| 2 | STRUCTURE AND FINANCIAL INTERMEDIATION PRACTICES OF IFIS | Related part from the book |
| 3 | RISK PROFILE OF ISLAMIC FINANCIAL INSTITUTIONS | Related part from the book |
| 4 | SUKUK MARKET RISK | Related part from the book |
| 5 | TAKAFUL MARKET RISKS | Related part from the book |
| 6 | ISLAMIC MICROFINANCE RISK | Related part from the book |
| 7 | DERIVATIVE INSTRUMENTS IN ISLAMIC FINANCE | Related part from the book |
| 8 | Midterm | - |
| 9 | RISK MITIGATION AND REGULATION IN ISLAMIC FINANCE | Related part from the book |
| 10 | ANALYSIS OF RISK MATRICES ACROSS FIVE MAJOR COUNTRY JURISDICTIONS | Related part from the book |
| 11 | Risk perception | Related part from the book |
| 12 | Risk reporting | Related part from the book |
| 13 | Risk measuring and management | Related part from the book |
| 14 | Internal audit and control | related part from the book |
| 15 | External controls and legal system | Related part from the book |
| 16 | Final Exam | - |