This document provides an overview of the course "Risk Management in Islamic Finance". The 3-credit, core course aims to identify risk management criteria and principles in Islamic finance. Topics covered include risk and uncertainty concepts, risk profiles of Islamic financial institutions, and risk management frameworks in Islamic banking, takaful and capital markets. Assessment is 50% continuous and 50% final exam. Students will complete an individual presentation and group assignment on analyzing risk management techniques based on Islamic principles.

1. Mahyuddin Khalid
RISK
MANAGEMENT
IN ISLAMIC
FINANCE
Introduction to IMU303

2. Click to edit Master title styleCourse Information
Course code : IMU303
Course name : RISK MANAGEMENT IN ISLAMIC FINANCE
Level : Diploma
Credit hour : 3
Contact hour : 3
Part : 5
Status : CORE
Pre-requisite : None
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3. Click to edit Master title styleLearning Outcomes
 Upon completion of this course, the student will be able to:
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CL01 Identify the criteria and principles of risk management in Islamic finance.
CL02 Discuss the notions of risk and uncertainty in Islam, its applications in risk
management, profile and characteristics of risks.
CL03 Analyse the risk event by application of knowledge obtained based on Islamic
technique.

4. Click to edit Master title styleTransferable Skills
1. Elucidate the risk management in Islamic Finance
2. Professional ethics and moral
3. Lifelong learning and basic management skills

5. Click to edit Master title styleCourse Description
 The course is important because it gives exposure to the risk management and its applications in
the Islamic financial institutions.
 This subject provides an awareness and essential understanding of managing risk in Islamic
finance.
 Topics covered the concepts and principles of risk management as well as the tools used to
evaluate risk.
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6. Click to edit Master title styleCourse Content
 Introduction to Risk and Uncertainty
 Risk Management in Islamic Finance
 Risk Profile of Islamic Financial Institutions
 Risk Management Framework in Islamic Banks
 Risk Management in Takaful
 Risk Management in Islamic Capital Market
 Risk Management in Islamic Finance: Way Forward
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7. Click to edit Master title styleScheme of Work
Topic Lecture Others
Self-
Learning
Total SLT
(hour)
1. Introduction to Risk and Uncertainty 3 5 8
1.1 Definition of risk, peril and hazard
1.2 Objective of risk management
1.3 Type of risk
1.4 Risk and uncertainty in financial environment
2. Risk Management 3 5 8
2.1 Meaning and definition of risk management
2.2 Risk management in finance
2.3 Scope of risk management
2.4 Risk management process
3. Risk Management in Islamic Finance 3 6 9
3.1 Overview of Islamic Finance
3.2 Overview of risk in Islamic Finance
3.3 Element of risk in structuring Islamic financial products and instrument
3.4 Types of risk faced by Islamic financial institutions
4. Risk Profile of Islamic Financial Institutions 3 6 9
4.1 CAMEL Analysis

8. Click to edit Master title styleScheme of Work
Topic Lecture Others Self-
Total SLT
(hour)
5. Risk Management Framework in Islamic Banks 3 5 8
5.1 Historical Development
5.2 Risk Management Process in Islamic Banks
5.3 Risk Management and Audit Function in Islamic Banks
6. Risk Management in Islamic Banks 3 5 8
6.1 Generic Risk
6.2 Specific Risk
7. Risk Management in Takaful 3 6 9
7.1 Takaful and Individual Risk
7.2 Risk Management in Takaful Companies
7.3 Risk Management in Takaful Operations
8. Risk Management in Islamic Capital Market 3 6 9
8.1 Development of Risk Management in Capital Market
8.2 Risk Profile in Islamic Capital Market
8.3 Risk Mitigation
8.4 Derivatives in Islamic Finance
9. Risk Management in Islamic Finance: Way Forward 3 5 8
9.1 Challenges of Risk Islamic Financial Institutions in the World
9.2 Prospects and Challenges Risk Management Development
9.3 Strategic Issues in the Implementation of Islamic Risk Management

9. Click to edit Master title styleAssessment
 Continuous Assessment 50%
 Group Assignment : 15%
 Individual Presentation : 10%
 Test and Quiz etc. : 25%
 Final Examination 50%
 TOTAL 100%
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10. Click to edit Master title styleReferences
Main Reference
• Title: Risk Management In Islamic Financial Institutions
• Author: Khadijah Iskandar
• Publication Information: IBFIM, Kuala Lumpur
• Year: 2014.
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11. Click to edit Master title styleFormat of Assignment
 Font:
 Times New Roman, Size: 12
 Spacing:
 1.5
 Pages:
 10 maximum
 References:
 THREE books or
 FIVE articles from journal
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12. Click to edit Master title styleReferencing Format
 Use the APA (American Psychological Association) referencing system.
 References in the text should include author’s name, publication year and page number if
available.
 Examples of citations in text :
 One author (Bean, 1992, p. 33); two authors (Graham & Krugman, 1989); more than two authors
(Bernanke et al., 1999) or
 Bean (1992, p. 33), Graham and Krugman (1989), and Bernanke et al. (1999).
 In the case of more than two authors, the first citation includes all the last names of the co-
authors. The above examples only apply for subsequent citations.
 References must be listed in alphabetical order of first author at the end of the paper.
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13. Click to edit Master title styleReferencing Format - Example
 Article in Journal:
 Dornbusch, R. (1976), Exchange Rate Expectations and Monetary Policy, Journal of International
Economics, 6, 231-44.
 Chapter in Book:
 Dornbusch, R. (1977), The Theory of Flexible Exchange Rate Regimes and Macroeconomic Policy, In J.
Herin, A. Lindbeck & J. Myhrman (Eds.),
 Flexible Exchange Rates and Stabilization Policy (pp. 123-43), Boulder, CO: Westview Press.
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14. Click to edit Master title styleReferencing Format - Example
 Books:
 Helpman E., & Krugman, P. (1985). Market Structure and Foreign Trade. Cambridge: MIT Press.
 Mishkin, F.S. (2004). The Economics of Money, Banking and Financial Markets (7th ed.). Boston: Addison Wesley
 Electronic Sources:
 Electronic reference formats recommended by the American Psychological Association. (2000, October 12).
Retrieved October 23, 2000, from http://www.apa.org/journals/webref.html
 Eid, M. & Langeheine, R. (1999). The measurement of consistency and occasion specificity with latent class
models: A new model and its application to the measurement of affect.
 Psychological Methods, 4, 100-116. Retrieved November 19, 2000, from the PsycARTICLES database
 *If information is retrieved from an aggregated database, and the name of the database is provided
and sufficient, no address is needed (as in the second example for electronic sources)*
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15. Click to edit Master title styleTabulation of Marks for Assignment
 Introduction 1%
 Facts 5%
 Explanation 5%
 Conclusion 1%
 Reference 2%
 Technical 1%
 Total 15%
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16. Click to edit Master title stylePresentation Format
 Format:
 PowerPoint presentation or ANY suitable methods
 Time of presentation:
 20 minutes
 Q & A session:
 10 minutes
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17. Click to edit Master title styleTabulation of Marks for Presentation
 Explanation of facts 4%
 Q & A 4%
 Creativity 1%
 Time management 1%
 Total 10%
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18. Click to edit Master title style
Mahyuddin Khalid
END
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