Risk Management in Islamic Banks and IFSB Capital Adequacy Standard

Course details

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.

Specifically, this important training course aims at:

• 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.

Who Should Attend?

This is a comprehensive programme designed to give delegates an all round understanding of the issues involved in Risk management for Islamic banking.

The course specifically targets:

• Investment Bankers
• Corporate and Commercial Bankers
• Corporate Financiers
• Private Bankers
• Analysts
• Asset managers
• Risk Management Managers
• Consultants
• Lawyers
• Investment Advisors
• Regulators
• Auditors and compliance professionals

COURSE OUTLINE

Day 1

• Islamic Banking in today’s World
• Risks in Islamic banks
• Comparison and contrast of risks in Islamic banks and risks in conventional banks

Day 2

• Risks addressed by Basel II and IFSB
• Risk Mitigation: kinds and effect on calculation of capital adequacy
• The three Pillars of Basel II Accord

Day 3

• 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

Day 4

• Sensitivity of Islamic banking operations to Basel II proposals
• Capital adequacy
• Importance and Calculation of credit Risk

Day 5

• IFSB Standard on credit risk in Islamic banks
• Methodologies of credit risk calculation
• IFSB 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!