Fundamentals of Islamic Finance and Banking

 

2 DAY WORKSHOP
(Workshop is not being offered at this time)

 

Introduction

Islamic finance is one of the fastest growing and most innovative financial disciplines in the international financial market. It is growing at a rate of 15% each year, and is expected to be US$2 trillion in size by 2010.  It is one of the least understood both by the western financial community and indeed by those in Islamic communities. This course offers a clear and understandable examination of this dynamic area of finance, and is essential for bankers, lawyers, institutional investors and corporate executives. This course will help participants to fully understand the fundamental religious principles underlying modern Islamic finance and banking. It will also provide comprehensive level of understanding of unique features of Islamic financial instruments as well as their usage in practice through real-life examples. Participants will also learn religious principles and their interpretation, as well as the diversity and adaptive mechanisms of Islam. Unique risks of Islamic financial instruments and Islamic financial institutions, the approach in assessing these risks and general principles of risk management in Islamic finance will also be covered in this course at introductory level.

Objectives 

 

At the conclusion of the course, the participants will be able to:

• Understand the basic philosophy and values underlying Islamic banking;
• Gain insight into the fundamental religious principles underlying modern Islamic finance and banking
• Learn about the full range of current Islamic products used in Islamic finance, banking, funds and insurance.
• Comprehend the role of regulation and supervision of Islamic banks
• Understand the unique risks embedded in Islamic products and basic principles in Islamic finance risk management

 

Who should attend this seminar?

This intensive and interactive workshop is designed for a wide audience of both experienced practitioners and new entrants involved in any aspect of Islamic finance, such as;

• Accountants and Auditors
• Asset Managers
• Business Consultants
• Business and Strategy Development Managers
• Chief Executive Officers
• Chief Financial Officers
• Company Secretaries
• Corporate Strategists, Developers and Planners
• Financial Analysts
• Financial Brokers
• Financial Directors
• Financial Managers
• Financial Planners
• Fund Managers
• General Managers
• Investment Analysts
• Managing Directors
• Merchant Bankers
• Pension Fund Trustees
• Policy and Strategy Directors
• Portfolio Managers
• Risk Directors and Managers
• Structured Finance Specialists
• Treasury Directors and Managers
• Central Bankers

 

Additionally, individuals or institutions that are considering entering the field, those who create and market Islamic products, and those catering to Islamic institutions, would strongly benefit from this seminar.

The conference is aimed at the following business sectors:

1. Consulting services

2. Financial services

3. Business development

4. Public sector finance

5. Pension and Insurance industry

6. Treasury and Risk Services

7. Private sector finance

8. Central Bankers and capital markets regulators

9. Fund Managers

10. Non-governmental organizations

Pre-requisites

No prior experience of risk-based management is required as this course first covers the basics before moving on to more advanced topics. However it is assumed that all delegates are familiar with common financial terms and have a basic understanding of banking and the functions of a financial institution. 

 

Content

 DAY 1 Session 1: The Meaning of Riba in Islam

• Definition of Riba in Islam
• First, Second, Third and Fourth Revelation of Riba
• Classification of Riba: Riba al Nasiah and Riba al fadl
• Laws of Riba al Fadl and Riba Al-Nasiah
• Is Commercial interest Riba?
• The Concept of Islamic Banking

 

Session 2: Introduction of Islamic Banking and Finance

• Basis of Islamic Banking and Finance: The Shariah
• Conceptual Arguments for Islamic Banking and Finance:
• The Development of Islamic Banking and Finance Industry
• The Islamic Banking Infrastructure
• Components of Islamic Banking and Finance Industry
• Operating Structures of Islamic Banking and Finance Industry
• Future of Islamic Finance Industry

 

Session 3: Financial Modes Used by Islamic Banks

• Sources of Funds and Uses of Funds: The Islamic banks’ balance sheet
• Fixed Income versus Profit-Loss Sharing Modes of Finance
• Mudaraba- Shariah Standards
• Musharaka-Shariah Standards
• Murabaha-Shariah Standards
• Ijara-Shariah Standards
• Salam and Parallel Salam-Shariah Standards
• Istisna and Parallel Istisna-Shariah Standards

 

Session 4: Murabahah Mode of Financing in Islamic Banking

• Basic Shariah Rules
• Risk & Requirements
• Application in Islamic Banking
• Consumer Finance
• Commodities
• Trade Finance

 

Session 5: Mudarabah Mode of Financing

• Basic Shariah Rules
• Application in Islamic Banking
• Unrestricted Mudarabah
• Restricted Mudarabah
• Partnership Financing

 

Session 6: Musharaka Mode of Financing

• Basic Shariah Rules
• Application in Islamic Banking
• Corporate Finance
• Project Finance
• Small Firm Finance

 

DAY 2 

Session 7: Salam Sale in Islamic Banking

• Basic Shariah Rules
• Risk and Requirements
• Applications in Islamic Banking
• Agricultural Finance
• Trade Finance

 

Session 8: Istisna Sale in Islamic Banking

• Basic Shariah Rules
• Risk and Requirements
• Application in Islamic Banking
• Project Finance
• Corporate Finance

 

Session 9: Ijara (Islamic Leasing)

• Basic Shariah rules
• Risk & Requirements
• Applications in Islamic Banking
• Corporate Finance
• Project Finance
• Islamic Versus Conventional Mortgage

 

Session 10: Securitization

• Securitization of Musharaka
• Securitization of Murabaha
• Securitization of Ijarah
• Applications in Islamic Banking
• Project Finance
• Corporate Finance
• Conventional Bonds versus Securitized Assets

 

Session 11: Risks of Islamic Financial Instruments

• Introducing risk concepts in Islamic Finance
• Concept and Classification of Risks
• Balance Sheet and Nature of Risks in Financial Institutions
• Unique Risks in Islamic Banking
• Risks according to stage of Islamic mode of financing
• Mitigating risks in Islamic Banking Products

 

Session 12: Risk Management in Islamic Banking

• Nature of Risks and Risk Management in Islamic Banking
• Techniques of Risk Mitigation in Islamic Banking
• Challenges of Risk Mitigation in Islamic Banking