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Introduction to Islamic Banking
Islamic finance in its modern form is barely 30 years old, yet it is a rapidly growing part of the financial sector and since the recent global banking crisis is one of the few areas where growth is still predicted. The size of the market is huge and demand for Islamic services exists wherever there is a significant Muslim community. It is reckoned that 250 financial institutions in more than 45 countries practice some kind of Islamic finance and the market has been growing at more that 15% per annum. This course explains the basic principles of this increasingly important sector and shows how these and its products differ from the conventional banking models.


Learning Objective
This introductory course is designed to teach delegates the principles of Islamic Banking and to highlight the differences between Islamic and conventional banking. It explores the different products and services commonly found in both the GCC and the Islamic market globally and it assesses the relative advantages and disadvantages of each. By the end of the course delegates will have a full understanding of the products and principles involved in Islamic Banking and how they differ from Western banking models.

Who Should Attend
Anyone seeking a basic understanding of the nature and form of Islamic Banking.

Teaching Methodologies
Classroom lectures and interactive practical workshop format intended to affirm the learning objectives.

Learning Pre-requisites
None although a basic knowledge of conventional banking and the financial services sector would be helpful.

Course Outline
Session 1: Conventional Banking models

  • History
  • Types of banks
  • Products
  • Basic Principles.

Session 2: The Islamic Business Environment

  • The Islamic World
  • Islam & Economic development
  • The modern Islamic state
  • Authority in an Islamic state
  • The Islamic legal system
  • Foreign business law and Islamic law
  • Islamic business ethics
  • Case Study: What are the key differences between Western and Islamic financial institutions?

Session 3: The Principles of Islamic finance

  • The prohibition of Riba
  • Key Islamic principles and their application to Islamic Finance
  • The principles of Islamic trade
  • Introduction to financial instruments
    • Mudaraba,
    • Musharaka,
    • Murabaha,
    • Ijara
    • Salam,
    • Istisn'a
    • Mutual funds
  • What is each product?
  • How do these differ from the equivalent Western products?
  • Introduction to Waqf & Zakat

Case Study: Consider the implications of key Islamic rulings on banking products and how these have shaped the products currently available? What are the key matters that you should consider when designing Islamic products?

Session 4: Governance of Islamic banks

  • Shariah boards
  • Jurisdiction
  • Conflicts between Sharia law, local law and international law
  • Differences in application of Islamic law between Islamic states
  • Which law prevails
  • Regulatory framework
  • Fairness & suitability.
  • Islamic bank issues:
    • Stakeholders.
    • Systemic Risk.
    • Regulations.
    • Depositor protection.
    • Internal control & risk management.
    • Information asymmetry.
  • Related party transactions

Session 5: The Structure of Islamic Banks

  • The structure of an Islamic bank
  • The difference between a wholly Islamic bank and a combined Western and Islamic bank
  • What banking services are available?
  • Social Services.
  • Investment & Investment Management.

Session 6: Sources of Customer Funds

  • Key concepts of depositing
  • Islamic deposit accounts
  • Company assets – reserves and equity
  • Short and long term investment capital
  • Islamic current accounts:
    • Amanah (Trust).
    • Wadia (Deposit).

Case Study: If you were a bank, how would you want to balance your funding structures?

Session 7: Islamic Bank Issues

  • The impact of the Bank for International Settlements
  • Fairness & suitability.
  • Confidentiality.
  • Transparency.
  • Islamic bank issues:
    • Stakeholders.
    • Systemic Risk.
    • Regulations.
    • Depositor protection.
    • Internal control & risk management.
    • Information asymmetry.
    • Related party transactions.

Session 8: Introduction to Islamic Investment

  • Incorporation of Islamic doctrines.
  • Link to Sharia’a precepts & ethics.
  • Key Islamic issues
  • Moral behaviour & social objectives
  • Conventional debt securities
  • Introduction to Sukuk bonds
  • Introduction to Islamic mutual funds
Session 9: Introduction to Islamic Insurance
  • Islam and insurance – what is prohibited?
  • Introduction to Takaful
  • Differences between Western and Islamic insurance
  • Limitations to Takaful

Session 10: Course Conclusion

  • Summary
  • Revision
  • Open discussion

State of the art facilities
Delegates can study in our comfortable hi-tech learning environment in London, near Liverpool Street Station.

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Introduction to Islamic Banking

Course Venue: London EC2