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 Materials

Required Materials

• Risk management for Islamic banks, Wahyudi, Imam, Rosmanita Fenny, Prasetyo, Mohammad Budi, Putri, Niken Iwani Surya. Wiley, 2015.

Additional Materials

• ISLAMIC FINANCIAL SYSTEM - Principles & Operations, ISBN : 978-967-349-127-8, ISRA, 2011.
• Draft Risk Management Guidelines for Islamic Banking Institutions. State Bank of Pakistan, Islamic Banking Department.
• Islamic Financial Services Board (IFSB) (2005). Guiding Principles of Risk Management for Institutions (Other than Insurance Institutions) Offering only Islamic Financial Services.
• Chapra, M., Umer & Khan, Tariqullah. Regulation and Supervision of Islamic Bank, Jeddah: RTI. Retrieved, From: http://www.sbp.org.pk/departments/idb/Regulation_Supervision.pdf.
• Essential of financial risk management , Karen A. horcher, Wiley, 2005.
• Khan, Tariqullah and Habib Ahmed. Risk Management: An Analysis of Issues in Islamic Financial Industry.
• Jeddah:IRTI. http://www.sbp.org.pk/departments/idb/Risk_Management.pdf.
• Kahf, M. (2006). Innovation and Risk Management in Islamic Finance: Shariah Considerations. Paper prepared for the Seventh Harvard International Forum on Islamic Finance.
• Saiful Azhar Rosly, Shariah Compliant Parameters Reconsidered, (INCEIF),Paper presented at the Annual Malaysian Finance Association Conference, Malaysia 4th – 5th June 2008.

• Financial risk management for Islamic banking and finance, Ioannis Akkizidis, sunil kumar khandelwal, Palgrave, 2008.
• Risk Analysis for Islamic Banks, Van Greuning, Hennie & Iqbal, Zamil, The World Bank, 2007.

Grading Scheme

Additional Information and Resources

Attendance: Students are expected to adhere to the attendance requirements. Students who fail to meet the minimum 70% attendance rate will be barred from taking the final exam. 

Academic Integrity: Students are expected to adhere to the ethical code of Istanbul Sabahattin Zaim University, and you commit to these principles by enrolling in this class. Academic dishonesty in any form is unacceptable, and penalties range from failing the exam to being dismissed from the university. We consider any violation of academic integrity to be a very serious matter.

Classroom Behavior:

• Everyone is strongly encouraged to ask questions and make comments during the class.
• Please turn off cell phones and other devices unless required by the lecturer.
• Please arrive on-time and expect to leave at the end of class.