IC312-Islamic Banking Practices

Module Provider: ICMA Centre
Number of credits: 20 [10 ECTS credits]
Level:6
Terms in which taught: Spring term module
Pre-requisites:
Non-modular pre-requisites:
Co-requisites:
Modules excluded:
Current from: 2022/3

Module Convenor: Dr Mohd Pisal Zainal
Email: m.p.zainal@henley.edu.my

Type of module:

Summary module description:

This module introduces basic concepts, principles, products and services offered by the Islamic banking system. It equips the students with a working knowledge of the products and services, either retail or corporate, offered by the Islamic banking system and familiarize the students with regulatory and legal frameworks governing the conventional and Islamic banking systems. The approach is from the dual-banking perspective.

This module is delivered at University of Reading Malaysia.

Aims:

This module provides students with a working knowledge of principles, products and services, and treasury functions and operation of an Islamic bank. In achieving these objectives, the students will be exposed to the structure of the Islamic financial system and the shari'ah (Islamic law) and legal frameworks of the Islamic financial system.

Assessable learning outcomes:

At the end of the course, students are expected to be able to:

• discuss the principles of Islamic finance.


• compare and contrast the legal and regulatory frameworks governing Islamic and conventional banking systems.


• analyse the balance sheet (T-account) of an Islamic bank – the asset and liability products offered by an Islamic bank.


• critically analyse the importance of Islamic interbank money market in managing liquidity risk.


• compare and contrast various financial services and channel management of an Islamic bank.


• discuss the corporate financing instruments/products offered by Islamic banks.

Critically evaluate the value-based intermediation (VBI) implementation within the Islamic banking industry.

Additional outcomes:

Information gathering skills, working in team as well as communication/presentation skills.

Outline content:

Introduction to principles of Islamic finance:

• Types of contracts in Islamic banking system


• Shari’ah and Regulatory Frameworks: Islamic and conventional banking systems


• The structure of Islamic financial system: Roles and functions of an Islamic bank


• Islamic Banking Operations:
  
  
  
  • Liability side: Types of deposit products
  
  
  • Asset side: Types of financing products
  
  
  
  


• Corporate Financing: Trade Financing


• Financial Services and Channel Management: Treasury functions and operations


• The Islamic Interbank money market


• Managing Islamic banking institutions: Risk management for Islamic banking system


• Deposit Insurance System: Islamic and conventional models

Application of value-based intermediation (VBI) within Islamic financial services industry

Global context:

This module covers the regulatory frameworks from the global perspective, since Islamic banking and other related financial institutions exist in more than sixty countries globally. However, the module will draw heavily from the experience of Malaysia in terms of the depth and width of products offering and sound regulatory frameworks.

Brief description of teaching and learning methods:

Teaching is delivered through a combination of lectures, seminars and class activities such as kahoot and mentimeter. The course broadly requires two hours of lectures per week and supported by seminar sessions once in every fortnight. For seminar sessions, students are required to work in groups.

Summative assessment- Examinations:

One two-hour, closed-books, closed-noted final examination.

The examination for this module will require a narrowly defined time window and is likely to be held in a dedicated exam venue.

Summative assessment- Coursework and in-class tests:

Formative assessment methods:

Constructive alignments are given during seminar classes.

Discussions and feedbacks on the draft of oral presentation.

Discussions and feedbacks on the draft of the assignments prior to final submission.

Penalties for late submission:

The Module Convener will apply the following penalties for work submitted late, in accordance with the University policy.

• where the piece of work is submitted up to one calendar week after the original deadline (or any formally agreed extension to the deadline): 10% of the total marks available for the piece of work will be deducted from the mark for each working day (or part thereof) following the deadline up to a total of five working days;


• where the piece of work is submitted more than five working days after the original deadline (or any formally agreed extension to the deadline): a mark of zero will be recorded.

The University policy statement on penalties for late submission can be found at: http://www.reading.ac.uk/web/FILES/qualitysupport/penaltiesforlatesubmission.pdf

You are strongly advised to ensure that coursework is submitted by the relevant deadline. You should note that it is advisable to submit work in an unfinished state rather than to fail to submit any work.

Assessment requirements for a pass:
A weighted average of 40%

Reassessment arrangements:

To re-sit the examination, if the weighted average is below 40%.

Additional Costs (specified where applicable):

Required textbooks:  £30

a. Ramli, Razli, Mohammad Khairi Saat & Haryani Aminuddin. 2014. Islamic Banking Practices: From the Practitioner’s Perspective. 2nd ed. Kuala Lumpur: IBFIM.

b. Saiti, Burhan. 2016. Islamic Banking Operations. Kuala Lumpur: International Council of Islamic Finance Educators.

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Last updated: 22 September 2022