Islamic Banking and Finance - Short

This Islamic Banking and Finance Training course covers the most important and widely used Shariah compliant Islamic banking products. The programme examines the foundations of Islamic finance and the catachrestic of Islamic banking, as well as a discussion of the principal contracts. Delegates will develop a detailed understanding of Islamic banking principles, as well as structured Islamic financial products. Delegates, will at the end of the program, comprehend the Islamic banking and financial products as compared to conventional products, as the viable alternatives to traditional forms of financing.

Course Objectives

This course covers the general issues of Islamic banking and finance, and is targeted to cover the following topics:
Foundations of Islamic banking and finance, Principles Of Financial Contracts In Shariah, Categories Of Financial Contracts In Shariah, Islamic Law principles and Prohibition (Riba, and gambling), Shariah Financing Contracts, and Islamic banking verses conventional banking.

Day One

• Islamic finance and introduces the basic contracts.

1. What are the principles of Islamic Banking?
2. What is Islamic banking?
3. What are the driving principles of Islamic banks?

• The characteristics of an Islamic financial system: -

1. Prohibition of Riba
2. Risk sharing /profit sharing/loss sharing
3. Time value of money Islamically interpreted
4. Prohibition of speculation
5. Sanctity of contracts
6. Sharia approved activities

• Liabilities of Islamic banks

1. Current accounts
2. Saving accounts
3. Investment accounts
4. Restricted investment accounts
5. Unrestricted investment accounts
6. Bank capital

Day Two

• Principles of Financial Contracts in Shariah

1. Islamic Moamalat
2. Investment in Islam
3. Obligations of investors
4. Bases of Islamic contracts

• Categories of Financial Contracts in Shariah

1. Limitations of Islamic contracts
2. Parties to the contract
3. Obligations to the parties of the contract
4. Equity and security under Shariah

• Islamic Law principles

1. Prohibition (Riba, and gambling)
2. Avoiding Riba in Islamic contracts
3. Prohibition of Gharar
4. Avoiding Gharar in Islamic contract

Day Three

• Nature of Islamic contracts

• Intermediation contracts

1. Mudaraba
2. Kafalah
3. Amana
4. Takaful
5. Wakalah
6. Juhala
7. Murabaha
8. Bay Salam
9. Bay Muaajal
10. Ijara
11. Istisna
12. Musharaka

Day Four

• Shariah Financing Contracts

1. Musharakah
2. Mudharabah
3. Ijara and Ijara-Wa-Iktina
4. Istisna and Parallel Istisna
5. Salam

• Murabaha

1. What is Murabaha?
2. What are the characteristics of Murabaha?
3. Murabaha terminology
4. What are the applications of Murabaha?
5. Practical steps in constructing a Murabaha transaction
6. Bank guarantees with Murabaha
7. Murabaha and the Sharia
8. How does Murabaha differ from conventional bank lending?
9. What are the risks for Islamic banks providing Murabaha facilities?
10. Applications of Mudaraba

• Musharaka

1. What is Musharaka?
2. Characteristics of Musharaka
3. Musharaka terminology
4. Applications of Musharaka
5. Structure of a Musharaka contract
6. Term structure of Musharaka

• Ijara and Ijara-Wa-Iktina

1. What is Ijara?
2. What is Ijara-Wa-Iktina?
3. Ijara-operational leasing
4. Ijara terminology
5. Applications of Ijara
6. Advantages of Ijara over bank borrowing
7. Characteristics of Ijara

• Istisna and Parallel Istisna

1. What is Istisna?
2. What is Parallel Istisna?
3. The characteristics of Istisna?
4. The characteristics of Parallel Istisna?
5. Istisna terminology
6. Applications of Istisna

• Salam

1. What is Salam?
2. What is Parallel Salam?
3. The characteristics of Salam
4. The characteristics of Parallel Salam
5. Salam terminology

Group discussion

Question and Answer session