Introduction to Islamic Banking

Name: Introduction to Islamic Banking
Rating: 3.8 (58 reviews)

Islamic finance, Islamic banking, Islamic commercial banking, risk management of Islamic bank and corporate governance

Created byDr Faleel Jamaldeen

Last updated 11/2020

English

English [Auto],

What you'll learn

Understand the basics of Islamic banking
Be able differentiate Islamic banking and conventional banking
Identify products of Islamic banks
Learn the basic terminology used by Islamic banks
Describe the functions, sources and uses of funds of Islamic banks
List the risks and risk management of Islamic banks

Course content

5 sections • 28 lectures • 54m total length

What is Islamic Finance1:24
Islamic banking is an integral part of Islamic finance. Islamic bank is the first sector to emerge from Islamic finance. Therefore it is important to know the basics of Islamic finance and proceed to Islamic banking. This section explain what is Islamic finance and its basic principles.
Prohibitions in Islamic Finance7:09
Islamic banking is based on the basic principles of Islamic finance. The Islamic commercial law prohibits the transactions in a Islamic banks based on the following four
1. Riba (usury/interest)
2. Gharar(deception/deceive)
3. Mysir/Qimar (Gambling or game of chance)
4. Investment in prohibited industries.

What is Islamic banking2:18
Primary functions of a Islamic Bank5:03
Explore the primary function of commercial banks: receiving customer deposits and using funds to earn income, including checking, savings, money market, and Islamic and conventional banks.
Secondary functions of a Islamic Bank2:20
Explore the agency and utility functions of Islamic banks, including handling customer transactions, fee-based letters of credit, and trade financing. Credit cards operate like debit cards with no interest.
Quiz 1

Learning Objectives0:25
Explore sources and uses of funds in Islamic commercial banks, identify Islamic financial instruments, and differentiate them from conventional banking practices.
Islamic banking - Sources of Funds3:14
Sources of Funds - Current Account/Checking account2:33
Islamic current accounts resemble conventional ones, with checks and withdrawals. They use wadiah, amanah, and qard hasan contracts, with the bank as custodian that can invest but must return funds.
Sources of Funds - Savings and Investment Account3:08
Use of Funds - Cash and fixed assets of the bank1:39
Use of Funds - Equity Financing1:36
Use of Funds - Trade Financing0:57
Use of Funds - Serving the community0:58
Explore how Islamic banking serves the community through ethical practices, zakat collection, and social responsibility, including hasana loans that require no profit and only principal repayment.
Quiz 2

Risk management - Islamic Bank Vs Conventional Bank1:24
Stakeholder of a Islamic bank1:25
Explore how Islamic banking engages stakeholders through risk awareness, guided by profit-and-loss sharing contracts within a sharia-compliant framework for deposits and investments.
Generic Risk1:18
Generic - Credit Risk1:44
Assess credit risk in equity-based Islamic banking instruments, addressing information asymmetry and misfeasance while mitigating risk with asset-based instruments.
Generic risk - Market risk1:29
General risk - Liquidity risk1:03
Explore liquidity risk in islamic banking by explaining how banks balance cash reserves and liquid assets to meet obligations, while protecting profits for current and investment account holders.
General risk - Operational Risk1:40
Explore operational risk in Islamic banking, focusing on contract and project financing risks, bank exposure to subcontractors, and the role of benchmarks, guidelines, and the legal environment.
General risk - Reputation risk0:32
Unique risk - Equity investment0:59
Explore equity investment risk in islamic banking, including direct and indirect sharia-compliant investments, potential declines in value, and related credit and liquidity risks.
Unique risk - Displaced commercial risk1:24
address the displaced commercial risk in islamic banking by sharing profits and losses, smoothing returns, and funding an investment risk fund from previous year's profit to cover losses.
Unique - Rate of return risk0:48
Unique - Sharia compliance risk1:33

Corporate Governance of Islamic banks1:59
Sharia compliance and Sharia supervisory board of Islamic bank1:24
Explore how Sharia compliance and the Sharia supervisory board uphold moral standards, ensure all transactions and investments align with Islamic principles, and reinforce corporate governance in Islamic banks.
Other compliances of Islamic banks2:49
Discover how islamic banks ensure accountability and transparency through stakeholder-focused disclosures, sharia compliance, robust risk management, internal controls, and audits including external, internal, and sharia audits.

Requirements

Description

This is course introduces the basics of Islamic banking. Islamic banking has become an important segment of banking industry after establishment of the first Islamic commercial bank, Dubai Islamic bank in 1975. Islamic banking differs from the traditional banking in principles though there are similarities in operations. There are more than 300 Islamic banks are operating in 50+ countries. Conventional banks has opened windows for Islamic banking in UK, middle east and south Asia. Therefore it is important to know how Islamic banks are different from conventional banks and how do they operate and how do the manage their risk.

Student who complete the course can get a Certificate from Islamic Finance from an accredited British Business School for a cost of $ 50. Please contact the school. International Institute of Islamic Economics and and Finance United Kingdom (IIISEF).

We develop the people to lead the Islamic economy from the world’s Islamic Economy Capital, UAE and UK. International Institute of Islamic Economics and Finance is a premium model Islamic business school based in United Kingdom (UK) and with branches in United Arab Emirates (UAE) and Kingdom of Saudi Arabia with global reach.

Our ambition is to become be a leading Islamic business school in the world offering courses in Islamic banking, Islamic insurance, Islamic capital market, Halal economics, Islamic marketing and Islamic business administration.

The Institute offer diplomas in Islamic banking and finance in 20+ different areas.

The Institute also offers fee waiver for students from developing countries up to 60%.

Please visit the web page of school International Institute of Islamic Economics and Finance or send an email admission@iiisef.com

Who this course is for:

Beginner of Islamic banking, bankers working in traditional banks, student in finance & accounting

Introduction to Islamic Banking

What you'll learn

Explore related topics

Course content

Introduction2 lectures • 9min

Islamic banking - Primary and Secondary Functions3 lectures • 10min

Sources and Uses of Funds in a Islamic Commercial Bank8 lectures • 15min

Risk Management of Islamic Bank12 lectures • 15min

Corporate Governance and Sharia compliance of Islamic banks3 lectures • 6min

Requirements

Description

Who this course is for: