Presentation slide for Risk Management in Islamic Finance

1. RISK MANAGEMENT
IN
ISLAMIC FINANCE
Mahyuddin Khalid

2. Course Information
Course code : IMU303
Course name : RISK MANAGEMENT IN ISLAMIC FINANCE
Level : Diploma
Credit hour : 3
Contact hour : 3
Part : 5
Status : CORE
Pre-requisite : None
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3. Learning Outcomes
Upon completion of this course, the student will be able to:
CL01 Identify the criteria and principles of risk management in Islamic finance.
CL02 Discuss the notions of risk and uncertainty in Islam, its applications in risk
management, profile and characteristics of risks.
CL03 Analyse the risk event by application of knowledge obtained based on Islamic
technique.
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4. Transferable Skills
1. Elucidate the risk management in Islamic Finance
2. Professional ethics and moral
3. Lifelong learning and basic management skills
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5. Course Description
The course is important because it gives exposure to the
risk management and its applications in the Islamic
financial institutions.
This subject provides an awareness and essential
understanding of managing risk in Islamic finance.
Topics covered the concepts and principles of risk
management as well as the tools used to evaluate risk.
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6. Course Content
Introduction to Risk and Uncertainty
Risk Management in Islamic Finance
Risk Profile of Islamic Financial Institutions
Risk Management Framework in Islamic Banks
Risk Management in Takaful
Risk Management in Islamic Capital Market
Risk Management in Islamic Finance: Way Forward
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7. Scheme of Work
Topic Lecture Others
Self-
Learning
Total SLT
(hour)
1. Introduction to Risk and Uncertainty 3 5 8
1.1 Definition of risk, peril and hazard
1.2 Objective of risk management
1.3 Type of risk
1.4 Risk and uncertainty in financial environment
2. Risk Management 3 5 8
2.1 Meaning and definition of risk management
2.2 Risk management in finance
2.3 Scope of risk management
2.4 Risk management process
3. Risk Management in Islamic Finance 3 6 9
3.1 Overview of Islamic Finance
3.2 Overview of risk in Islamic Finance
3.3 Element of risk in structuring Islamic financial products and instrument
3.4 Types of risk faced by Islamic financial institutions
4. Risk Profile of Islamic Financial Institutions 3 6 9
4.1 CAMEL Analysis
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8. Scheme of Work
Topic Lecture Others Self-Learning
Total SLT
(hour)
5. Risk Management Framework in Islamic Banks 3 5 8
5.1 Historical Development
5.2 Risk Management Process in Islamic Banks
5.3 Risk Management and Audit Function in Islamic Banks
6. Risk Management in Islamic Banks 3 5 8
6.1 Generic Risk
6.2 Specific Risk
7. Risk Management in Takaful 3 6 9
7.1 Takaful and Individual Risk
7.2 Risk Management in Takaful Companies
7.3 Risk Management in Takaful Operations
8. Risk Management in Islamic Capital Market 3 6 9
8.1 Development of Risk Management in Capital Market
8.2 Risk Profile in Islamic Capital Market
8.3 Risk Mitigation
8.4 Derivatives in Islamic Finance
9. Risk Management in Islamic Finance: Way Forward 3 5 8
9.1 Challenges of Risk Islamic Financial Institutions in the World
9.2 Prospects and Challenges Risk Management Development
9.3 Strategic Issues in the Implementation of Islamic Risk Management 8

9. Assessment
Continuous Assessment 50%
 Group Assignment : 15%
 Individual Presentation : 10%
 Test and Quiz etc. : 25%
Final Examination 50%
TOTAL 100%
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10. References
Main Reference
• Title: Risk Management In Islamic Financial Institutions
• Author: Khadijah Iskandar
• Publication Information: IBFIM, Kuala Lumpur
• Year: 2014.
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11. Format of Assignment
Font:
 Times New Roman, Size: 12
Spacing:
 1.5
Pages:
 10 maximum
References:
 THREE books or
 FIVE articles from journal
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12. Referencing Format
 Use the APA (American Psychological Association) referencing
system.
 References in the text should include author’s name,
publication year and page number if available.
 Examples of citations in text :
 One author (Bean, 1992, p. 33); two authors (Graham & Krugman,
1989); more than two authors (Bernanke et al., 1999) or
 Bean (1992, p. 33), Graham and Krugman (1989), and Bernanke et al.
(1999).
 In the case of more than two authors, the first citation includes
all the last names of the co-authors. The above examples only
apply for subsequent citations.
 References must be listed in alphabetical order of first author at
the end of the paper.
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13. Referencing Format - Example
Article in Journal:
 Dornbusch, R. (1976), Exchange Rate Expectations and Monetary
Policy, Journal of International Economics, 6, 231-44.
Chapter in Book:
 Dornbusch, R. (1977), The Theory of Flexible Exchange Rate
Regimes and Macroeconomic Policy, In J. Herin, A. Lindbeck & J.
Myhrman (Eds.),
 Flexible Exchange Rates and Stabilization Policy (pp. 123-43),
Boulder, CO: Westview Press.
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14. Referencing Format - Example
 Books:
 Helpman E., & Krugman, P. (1985). Market Structure and Foreign Trade.
Cambridge: MIT Press.
 Mishkin, F.S. (2004). The Economics of Money, Banking and Financial Markets (7th
ed.). Boston: Addison Wesley
 Electronic Sources:
 Electronic reference formats recommended by the American Psychological
Association. (2000, October 12). Retrieved October 23, 2000, from
http://www.apa.org/journals/webref.html
 Eid, M. & Langeheine, R. (1999). The measurement of consistency and occasion
specificity with latent class models: A new model and its application to the
measurement of affect.
 Psychological Methods, 4, 100-116. Retrieved November 19, 2000, from the
PsycARTICLES database
 *If information is retrieved from an aggregated database, and the name of
the database is provided and sufficient, no address is needed (as in the
second example for electronic sources)*
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15. Tabulation of Marks for Assignment
Introduction 1%
Facts 5%
Explanation 5%
Conclusion 1%
Reference 2%
Technical 1%
Total 15%
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16. Presentation Format
Format:
 PowerPoint presentation or ANY suitable methods
Time of presentation:
 20 minutes
Q & A session:
 10 minutes
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17. Tabulation of Marks for Presentation
Explanation of facts 4%
Q & A 4%
Creativity 1%
Time management 1%
Total 10%
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18. Mahyuddin Khalid
END
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