Open AccessA SUCCINCT ANALYSIS OF MITIGATING LIQUIDITY RISK IN ISLAMIC BANKS IN THE LIGHT OF LIQUIDITY AND RISK MANAGEMENT PRINCIPLES
Author(s) -
Naeem Suleman Dhiraj,
Atharyanshah Puneri,
Hafiz Benraheem
Publication year - 2019
Publication title -
ijibe (international journal of islamic business ethics)
Language(s) - English
Resource type - Journals
ISSN - 2502-4647
DOI - 10.30659/ijibe.4.1.527-539
Subject(s) - liquidity risk , market liquidity , islam , accounting liquidity , business , liquidity crisis , risk management , task (project management) , finance , economics , management , philosophy , theology
Liquidity management has been incessantly challenging for the financialinstitutions and especially Islamic financial institutions due to their nature of business. Theconvoluted nature of liquidity management impedes the task of Islamic banks in managingtheir liquidity efficiently. Given the intricacies of the subject matter, this paper delves intoelaborating the key aspects of liquidity management; subsequently, discusses theconsequences of poor liquidity management and problems inherent in managing the latter byanalyzing the real-life failure of Islamic financial institution as a result identifying the issues that could possibly jeopardize the existence of the Islamic banks. Finally, equipping thereaders with tools to mitigate the liquidity risk.