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Sharia Finance & Islamic Banking

Duration: 3 days
  • Foundations of Islamic Banking and Finance
  • Islamic Captal Markets
  • Islamic Wealth Management
  • Islamic Principles of Risk Management
  • Islamic Treasury and Derivatives 
  • Islamic Corporate and Retail Finance
  • Islamic Funds Structuring and Screening
  • Islamic Banking and Governance Issues
The objective of this course is to introduce fundamental concepts and principles relating to Islamic Banking and Finance and to cover how the Islamic market functions. Over the last decade, Islamic finance has grown rapidly across the world, conservatively estimated at 12-18% a year. Islam emphasizes fairness and encourages and promotes the right of individuals to pursue personal economic wellbeing butwellbeing, but makes a clear distinction between what commercial activities are allowed and what are forbidden. One well known key Sharia ruling is the strict and explicit prohibition of Riba also known as interest. The Islamic economic model is based on a risk and profit-sharing (loss-bearing) Philosophy together with contractual certainty. Uncertainties or ambiguities that can lead to disputes may render a contract void under Sharia. The course aim at helping the financial professional to understand the character of Islamic Finance; its origins, its rules; and distinctions from traditional finance as well as consequences for marketing, accounting and risk management.

Day One

09.00 - 09. 15 Welcome Address

09.15 - 12.00 Foundations of Islamic Banking and Finance (Part I)

  • Islamic Commercial law
  • Coe Islamic Rules of Contract
  • Rules of Sarf or monetary Exchance
  • Leasing Concepts in Shariah
    - Ljara and Bai al Manfa'a
  • Project Finance Concepts in Shariah
    - Istisna'a, Ju'ala and Istijrar)
  • Sales Concepts
    - Murabaha and Tawarruq   

12.00 - 13.00 Lunch

13.00 - 16.30 Foundations of Islamic Banking and Finance (Part II)

  • Fiduciary Concepts in Shariah
    - Mudaraba and Wakala
  • Partnership Concepts in Shariah
    - Musharaka
  • Forward Sales in Shariah
    - Salam
  • Sukuk Principles in Shariah
    - Challenges for Market Growth
  • Review of AAOFI and IFSB Accounting


Day Two

09.00 - 09.15 Recap

09.15 - 10.15 Islamic Capital Markets

  • How to create Islamic Securities and how to Securitize many Islamic Asset Classes?
    - The Principles, Issues and Processes
    - Syndication, Sukuk and Derivatives
    - Shurut relevant and permissible
  • Market Adaptations
    - Strengths and Weaknesses

10.30 - 12.00 Islamic Wealth Management

  • Primary Islamic concerns relating to Money and Investing
    - The Impacts on common Investment Practices and Vehicles
    - The altered Character of Investing and Wealth Management 

12.00 - 13.00 Lunch

13.00 - 14.30 Islamic Principles of Risk Management (Part I)

  • Basel III and Islamic Financial Service Board Risk Management Standards
  • Hedging Requirement of IFI’s
  • Standardization of Documentation in Islamic Finance
  • ISDA / IIFM Tahawwut (Hedging) Master Agreement
  • Exposure and Loss given Default in the Context of the unique Islamic Instruments

14.30 - 14.45 Coffee Break

14.45 - 16.30 Islamic Principles of Risk Management (Part II)

  • Islamic Financial Risk Management Products
  • Islamic Hedging Argument
  • Structuring Hedging Vehicles 
  • Profit Rate Swap Structure
    - Commodity Risk
    - Execution Risk
    - Costs  
  • Small Exercises

Day Three

09.00 - 09.15 Recap

09.15 - 10.15 Islamic Treasury and Derivatives

  • How the Key Concepts may be applied in the Islamic Bank's Treasury
  • Managing Foreign Exchance
  • Managing excess Cash
  • Diffeencies between Bank, Investment Bank and sophisticated Corporate
  • The Relevance of various derivative Structures
  • Small Exercises

10.15 - 10.30 Coffee Break

10.30 - 12.00 Islamic Corporate and Retail Finance

  • Balance Sheet and Income Staments
  • Stress Testing the Balance Sheet to identify the Risk Characteristics of the Transaction Types
  • Tre correct Addressing of Retail Banking Needs
  • Integration with Treasury and other institutional Functions

12.00 - 13.00 Lunch

13.00 - 14.45 Islamic Funds Structuring and Screening

  • The Universe of modern Islamic Investment Funds
    - What makes them Islamic?
    - Why are they restricted in their Investment Universe?
    - Are there Structural and Jurisdictional Issues that affect the Islamic Investment Fund World?
    - Structuring Shariah compliant Investment Funds

14.45 - 15.00 Coffee Break

15.00 - 16.15 Islamic Banking and Governance Issues

  • Business Differences between Islamic Banks and Traditional Banks
  • Particular Challenges in Terms of Basel III Implementation
  • Compliance with Prevailing Central Bank Regulatory Practices
  • Small Exercises

16.15-16.30 Summary, Evaluation and Termination of the Seminar