Principles of Islamic banking and finance/PIBF202/Overview

You have successfully completed unit 1 of the Principles of Islamic banking and finance course i.e., Contextual background of Islamic banking and finance. You must have now a clear understanding of the

• reasons behind the establishment of Islamic banking and finance industry,
• the philosophy and main ingredients of a new alternative of the conventional finance
• or the changes needed in the existing banking system and other financial institutions to make them compatible and in conformation with Islamic business laws and ethical requirements.

Dubai Islamic Bank

Unit 2 provides an overview of Islamic banking industry: its origin and current situation. It elucidates different types of Islamic banking products and their utilization. It explains the role of Shari’ah Boards that validates individual Islamic banks’ products, procedures and operations. The advisory function of Islamic Financial Services Board (IFSB) and Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) are also explained. Finally, this unit discusses the achievements and shortcomings of this industry and the challenges and prospects it faces in the future.

Learning outcomes of Unit 2

After completing this unit, the students will be able to

1. Analyze distinctive modus operandi of Islamic banks
2. Explain legal and regulatory environment of Islamic banks
3. Analyze current challenges & future prospects of Islamic banking

Like Unit 1, this unit is also divided in 5 sections. They are:

1. Key Differences Between Islamic and Conventional Banking
2. Islamic Banking Products
3. Structure and Operations of Islamic Banks
4. Financial Reporting in Islamic Banks
5. Present Status of Islamic Banking Industry, Challenges and Future Prospects