Introduction

In an increasingly globalized financial landscape, Islamic banking has emerged as a distinct and rapidly growing sector, driven by a foundational adherence to Sharia principles. This unique system offers a compelling alternative to conventional finance, emphasizing ethical transactions, risk-sharing, and real economic activity over interest-based dealings. Understanding the intricate architecture of Islamic banking institutions, their diverse Sharia-compliant products, bespoke risk management strategies, and specialized operational frameworks is no longer a niche expertise but a critical skill for financial professionals seeking to tap into this multi-trillion-dollar market. As the demand for ethical and sustainable finance accelerates globally, mastering the nuances of Islamic finance becomes essential for ensuring compliance, fostering innovation, and contributing to a more equitable financial ecosystem. This essential training course focuses on Islamic Banking: Sharia-compliant Products, Risk Management Strategies, Operational Frameworks, and the Overall Structure of Islamic Banking Institutions, preparing professionals for leadership in this dynamic field.

This intensive training course provides a comprehensive and practical guide to the core tenets and advanced applications within Islamic banking. Participants will gain in-depth knowledge of Sharia-compliant financial products, their underlying contracts, and how they differ from conventional instruments. We will delve into topics such as unique risk management strategies tailored for Islamic finance, the operational frameworks supporting Islamic banking institutions, and the role of Sharia supervisory boards in ensuring compliance. The course will cover strategies for product innovation within Sharia guidelines, managing liquidity and capital adequacy in an Islamic context, and navigating the global regulatory landscape for Islamic finance. By mastering the intricate balance between Sharia principles and sound financial practices, you will be equipped to design, implement, and manage robust Islamic banking operations and contribute to the ethical growth of the financial industry.

Target Audience

• Banking and Finance Professionals
• Sharia Scholars and Advisors
• Risk Managers and Compliance Officers
• Investment Bankers and Analysts
• Legal Professionals in Financial Services
• Regulators and Policy Makers
• Business Owners and Entrepreneurs
• Students of Finance and Islamic Studies

Course Objectives

• Understand the fundamental principles of Sharia governing Islamic finance.
• Differentiate between Islamic and conventional banking models and their products.
• Analyze the structure and operational framework of Islamic banking institutions.
• Master the mechanics and application of key Sharia-compliant products (e.g., Murabaha, Ijarah, Mudarabah).
• Identify and assess unique risks inherent in Islamic banking operations.
• Develop effective risk management strategies for Islamic financial products.
• Comprehend the role and functions of Sharia Supervisory Boards in governance.
• Learn about liquidity management and capital adequacy in Islamic banks.
• Explore the regulatory and legal frameworks governing Islamic finance globally.
• Acquire skills in product development and innovation within Sharia guidelines.
• Examine the social and ethical impact of Islamic banking practices.

Duration

10 Days

Course Content

Module 1: Foundations of Islamic Finance & Banking

• Historical context and evolution of Islamic finance.
• Core principles of Sharia (Riba, Gharar, Maysir, Halal/Haram).
• Ethical and philosophical underpinnings of Islamic banking.
• Key distinctions between Islamic and conventional financial systems.
• Global landscape and growth of Islamic banking.

Module 2: Sharia-Compliant Deposit Products & Accounts

• Current accounts (Qard) and their operational aspects.
• Savings accounts (Wadiah, Mudarabah) and profit distribution.
• Investment accounts (Mudarabah, Wakalah) for depositors.
• Understanding the risk-sharing paradigm for deposits.
• Customer relationship management in Islamic deposits.

Module 3: Sharia-Compliant Financing Products I (Trade-Based)

• Murabaha (Cost-Plus Sale): structure, applications, and risk.
• Musawamah (Bargaining Sale) and its uses.
• Salam (Forward Sale) and its role in agricultural/commodity finance.
• Istisna' (Manufacturing Contract) for project finance.
• Case studies and practical structuring of trade finance products.

Module 4: Sharia-Compliant Financing Products II (Leasing & Partnership)

• Ijarah (Leasing): operating lease vs. finance lease (Ijarah Muntahia Bil Tamleek).
• Musharakah (Partnership/Joint Venture): diminishing Musharakah, permanent Musharakah.
• Mudarabah (Profit-Sharing Partnership): unrestricted vs. restricted.
• Sukuk (Islamic Bonds): types, issuance, and secondary market.
• Structuring complex asset-backed financing deals.

Module 5: Risk Management Framework in Islamic Banking

• Overview of conventional financial risks: credit, market, operational, liquidity.
• Unique risks in Islamic banking: Sharia non-compliance risk, equity investment risk.
• Operationalizing risk management across Sharia-compliant products.
• Risk sharing and mitigation mechanisms inherent in Islamic contracts.
• Basel III and IFSB standards for risk management in Islamic banks.

Module 6: Credit Risk Management in Islamic Finance

• Assessing creditworthiness in Sharia-compliant financing.
• Collateral and guarantees in Islamic contracts.
• Default management and recovery in the absence of interest.
• Managing portfolio credit risk for various Islamic products.
• Specific challenges in managing credit risk for Mudarabah/Musharakah.

Module 7: Liquidity Risk Management in Islamic Banking

• Sources of liquidity risk unique to Islamic banks.
• Islamic money market instruments: Commodity Murabaha, Sukuk repos.
• Central bank facilities and interbank Islamic financing.
• Developing liquidity contingency funding plans.
• Impact of Sharia principles on liquidity management tools.

Module 8: Operational Risk & Compliance in Islamic Banking

• Identifying and mitigating operational risks specific to Islamic finance.
• Fraud prevention and internal controls in Sharia-compliant operations.
• Ensuring Sharia compliance throughout operational processes.
• Technology and automation in Islamic banking operations.
• Business continuity planning and disaster recovery.

Module 9: Sharia Governance & Ethical Oversight

• Role and responsibilities of the Sharia Supervisory Board (SSB).
• Qualifications and appointment of Sharia scholars.
• Fatwa issuance process and its authority.
• Sharia audit and compliance review mechanisms.
• Corporate governance best practices in Islamic financial institutions.

Module 10: Regulatory & Legal Frameworks

• Key global regulatory bodies: IFSB, AAOIFI, OIC.
• National regulatory approaches to Islamic banking.
• Legal enforceability of Islamic financial contracts.
• Dispute resolution mechanisms in Islamic finance.
• Convergence and divergence of regulatory frameworks.

Module 11: Capital Adequacy & Prudential Requirements

• Capital computation for Islamic banks (Tier 1, Tier 2).
• Applying Basel III standards to Islamic financial institutions.
• Risk-weighted assets (RWA) for Sharia-compliant products.
• Stress testing and capital planning in Islamic banking.
• Profit equalization reserves (PER) and investment risk reserves (IRR).

Module 12: Treasury & Investment Management

• Sharia-compliant investment strategies for Islamic banks.
• Managing foreign exchange risk in an Islamic context.
• Proprietary investments and fund management (Islamic equity funds, Sukuk funds).
• Ethical screening of investments (Halal investing).
• Role of Takaful (Islamic insurance) in risk transfer.

Module 13: Product Development & Innovation

• Methodology for developing new Sharia-compliant products.
• Ensuring Sharia authenticity and market viability.
• Innovation in digital Islamic finance (FinTech, blockchain applications).
• Addressing contemporary financial needs with Sharia solutions.
• Case studies of successful and challenging product innovations.

Module 14: Marketing & Client Engagement in Islamic Banking

• Communicating the value proposition of Islamic banking.
• Building trust and confidence with Sharia-conscious clients.
• Marketing strategies for Sharia-compliant products.
• Addressing common misconceptions about Islamic finance.
• Client lifecycle management in an ethical banking context.

Module 15: Future Trends & Challenges in Islamic Banking

• Growth drivers and emerging markets for Islamic finance.
• Impact of sustainability (ESG) on Islamic banking.
• The role of social finance (Zakat, Waqf, Sadaqa) in modern Islamic banking.
• Challenges: standardization, talent, public perception.
• Strategic outlook and opportunities for the Islamic finance industry.

Training Approach

This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.

Tailor-Made Course

This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Training Venue

The training will be held at our Skills for Africa Training Institute Training Centre. We also offer training for a group at requested location all over the world. The course fee covers the course tuition, training materials, two break refreshments, and buffet lunch.

Visa application, travel expenses, airport transfers, dinners, accommodation, insurance, and other personal expenses are catered by the participant

Certification

Participants will be issued with Skills for Africa Training Institute certificate upon completion of this course.

Airport Pickup and Accommodation

Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Terms of Payment: Unless otherwise agreed between the two parties’ payment of the course fee should be done 7 working days before commencement of the training.