Asked 22nd Aug, 2012

How are Islamic banks going to cater the problem of Risk management?

Measurement and provisioning for Credit Risk, Operational Risk and market risk.

Most recent answer

Md.Akther Uddin
University of Science and Technology Chittagong
Risk Management Practices in Islamic Bank: A Case Study of Islami Bank Bangladesh Limited

All Answers (6)

Munir Ahmad Mughal
University of the Punjab,Lahore High Court,
By observing honesty and just behaviour. There should be declaration of true profits and accounts open to all at all times. System should be equity oriented.
Measurement for Credit Risk can be above mellui method of financing the restructuring or rescheduling. while market risk can be addressed using the principle of sharing profits or losses. And Operational risk can be overcome by managing market risks related to changes in exchange rates which may cause harm Bank
This has been dealt with in a comprehensive manner in relevant guidelines of the Islamic Financial Services Board (IFSB).
Abdul Azeez Maruf Olayemi
Jumeira University
It depends on the type of risk that is in question. That is, whether it is Shariah risk, legal risk, liquidity risk and etc.  Each type of risk is dealt with in the guidelines and regulations of Central Banks and other regulatory bodies such as IILM, IFSB, Basel and etc. Thus, the onus rests on the regulators to apply the law to the letter to ensure that risks are avoided.  Since regulators play important role in the regard. The only way to mitigate risk is to bring experts on board.
Salman Ahmed Shaikh
Shaheed Zulfikar Ali Bhutto Institute of Science and Technology
You can read a short article describing risk management is Islamic banking at:
Md.Akther Uddin
University of Science and Technology Chittagong
Risk Management Practices in Islamic Bank: A Case Study of Islami Bank Bangladesh Limited

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