Islamic Finance

Over the past three decades, interest in the Islamic Financial System has been increasingly focused on Islamic Financial Institutions, which have progressed rapidly in a global economic environment. Despite considerable research, there is still confusion about the underlying concepts of Islamic Finance and its functionality. This course Euromoney Training course introduces and explains the basic pillars of Shari'ah Law as applied to finance, explores its various interpretations and highlights the best practice. The programme discusses the functions of the Islamic financial System including their products and services such as Murabaha, Mudarabah, Musharakah, Bai Salam, Istisna and Ijarah. Together with your colleagues, you will understand the development of instruments originating in Islamic capital markets such as equity funds, securitisation (sukuks), hedge funds, and real estate funds. Understand how Islamic investment and commercial banks function, Islamic insurance Islamic Commercial law, financial risk and how it is managed by Islamic Financial Institutions. How will this course will assist you? On completion of this 3-day course you will be able to: Understand how the Islamic economic and financial systems function. Understand the basic prohibitions and allowances under Shari'ah Law. Know the different types of Islamic financial institutions. Discover the major financial market instruments used by Islamic institutions. Identify risks in the Islamic financial system and ways to manage them. Understand Islamic insurance and real estate finance. Who Should Attend? Financial Regulators Economists Financial Market Participants
Day 1 Conceptual issues Background Shari’ah Law and Riba. Islamic Economic system. Islamic Financial system. Case study: comparison with conventional systems Prohibitions and allowances in Islam Debt and generous giving. Debt transference. Debt guarantee. Gambling and games of chance. Risk capital. Sharing risk and return. Fair pricing. Social benefits. Some aspects of Islamic Commercial Law Bank lending. Penalty for default. Early repayment. Bankruptcy / insolvency. Debt securities. Case study Day 2 Financial institutions Types of accounts. Consumer and business loans. Credit and debit cards. Asset liability management. Islamic windows. Roles and responsibilities of the Shari’ah board. Financial instruments & contracts Transactional contracts Bai. Serf. Ijarah. Examples Case study: ijarah in practice. Financing contracts Murabaha (mua’jjal, commodity, shares). Khiyar. Tawarruq. Ijarah (asset backed financing). Musharakah (P & L sharing). Diminishing musharakah (fixed asset and trade financing). Examples Case study: commercial property financing. Intermediation contracts P & L sharing. Fee-based services. Examples Day 3 Islamic capital markets Equity mutual funds. Sukuks. Tradable and non-tradable assets. Case study: sukuk structures. Mortgages Musharakah-based models. Ijarah-based models. Takaful (Insurance) The concept of insurance in Islam. Life insurance vs. casualty/property insurance. Takaful in practice. The challenges. Risk management Financial market risk: assessment and management. Financial institutions risk: assessment and management. Specific risks faced by Islamic financial institutions. Case study: risk management Course summary and close