MBA Islamic Banking and Finance

Compulsory Modules

Module 1: Fundamentals of Finance (Islamic and Conventional)

This module provides an introduction to the elementary and principles of finance, in the perspective of Islamic and conventional. It equips the students with comprehensive understanding of the fundamentals that govern the financial systems in both worlds.
Topic includes:
• Essential elements of conventional and Islamic finance
• Differences and similarities in the Islamic and conventional financial system
• Contemporary finance transactions that deals with the Shariah principles as well as the conventional.
• Application of Shari'ah Principles in the Global Capital Market

Module 2: Quantitative Methods for Finance

The module focused uniquely on financial applications, with the main concepts illustrated by numerous examples and Excel spreadsheets. The very high practical content will make it accessible to all students, even for those with little previous training in mathematics.
Topic includes:
• Foundations
• Descriptive statistics
• Hypothesis testing
• Calculus
• Algebra and solving equation
• Probability theory in finance
• Regression
• Numerical methods

Module 3: Islamic Commercial Law (Fiqh, Muamalat) and Economics

The module presents muamalat, fiqh as a science and methodology in developing Islamic finance and economics. The module discusses the application of muamalat, fiqh rulings to transactions and contracts in Islamic finance. It also deals with the variant class of contracts in Islamic law. The students will gained in depth understanding of the principles governing various forms of mechanism applied in Islamic and in particular, the contemporary financial dealings within the framework of Islamic and conventional market.
Topic includes:

• Introduction of Muamalat, Fiqh
• General objectives of Shariah
• Sources of Islamic law
• School of thoughts, qiyas, ijtihad, fatwa
• Role of Shariah scholars
• Comparison between economics from the Islamic view and conventional concepts and conventions
• Essential elements of Shariah contract
• Classification of contract - unilateral and bilateral
• Drafting contract in Islamic finance
• Structure of modern mechanism applied in Islamic finance

Elective Modules

Module 4: Islamic Banking and Finance vs Conventional Banking and Finance

The module allows the students to developed deeper understanding to components and differences between Islamic and conventional banking and financial institutions. It introduces the students to variant products offered by most of Islamic banking and financial institutions. It briefly deals with the financial engineering and design of modern Islamic financial products.
Topic includes:

• Fundamentals and key features in Islamic banking and finance
• An overview of convetional banking system
• Key differences between the Islamic and conventional banking and finance
• Main characteristics of various types of Islamic banking products and its operations
• Islamic banking service for capital market product
• Islamic banking and financial engineering

Module A: Islamic Capital Market

The purpose of the module is to acquaint the students with characteristics and trends in the emerging capital markets including the Middle East countries. It provides the students with comprehensive understanding of conventional and Islamic markets in terms of instruments, regulations, level of maturity, depth and sophistication. It deals extensively with various Islamic capital products, with a focus on structure of Islamic funds, sukuk, derivatives, leverage and hedges.
Topic includes:
• Introduction to primary underlying principles of Islamic finance as applied in Islamic capital market
• Capital markets and securitization
• Legal, tax and infrastructure concerns for the Islamic capital market
• Sukuk and securitization
• Derivatives: Products and Instruments
• Islamic funds: Principles and structures
• Leverage: Structures and challenges
• Hedges
• Development of Asian and Middle East Islamic capital market

Module B: Takaful (Islamic Insurance)

This aim of this module is to expose the students to Takaful and its rationale as an alternative to conventional insurance. It deals with the basic elements, and models for Takaful products. The operation of Takaful and the risks involved and how these risks are managed. It engages the students with Takaful and Re-takaful (Re-insurance), their operation and challenges.
Topic includes:
• Introduction to Takaful and its origin
• Takaful versus Conventional Insurance
• Risks and Risk Management
• Takaful Operations - Models
• Takaful Products
• Actuaries and its principles
• Accounting treatment for Takaful
• Takaful and Re-Takaful within conventional insurance market

Module C: Corporate Governance and Compliance

This module examines the governance and transparency issues in Islamic financial institutions, supervisory and regulatory issues. It also deals with the role of the Shariah Supervisory Board, Shariah compliance audit; as well as accounting and taxation issues.
Topic includes:
• Corporate Governance and compliance in Islamic financial institutions
• Islamic accounting and audit standard - Accounting and Auditing Organization for Islamic Financial Institutions (AAOFI), International Financial Regulating Standard (IFRS) of the International Accounting Standards Board
• International Convergence of Capital Measurement and Capital Standards (Basel II) issued by the Bank for International Settlements (BIS), Islamic Financial Service Board's (IFSB) Capital Adequacy Standards (CAS)
• Shariah Supervisory Board/Committee
• AAOFI's Standard on Governance of Shariah Advicement Islamic, IFSB Guiding Principles for the Supervisory Review Process

Module D: Risk Management

This module introduces the students to the various type of risk encountered by Islamic financial institutions. It emphasizes the concept of Islamic risk management and its role in credit operation from Shariah perspective
Topic includes:
• Overview of Islamic risk management
• Risk in Islamic financial instruments
• Measures of mitigating risks taken by Islamic financial institutions
• Operational riks: Shariah Compliance Review
• Credit risk: Shariah Compliance Review
• Market Risk, Rate of Return Risk and Displace Commercial Risk: Shariah Compliance Review
• Overview of the Islamic Financial Services Board's (IFSB) Guiding Principles on Risk Management

Module E: Elementary of Arabic language

This module intends to equip the student with basic Arabic language to gain better understanding of the texts referred to in the classic references of Islamic law, in particular fiqh, usul fiqh muamalat and mualamat. It facilitates further the capability to structure Shariah compliance products within the Islamic framework.