Open AccessRisk Management of Islamic Banking: An Islamic Perspective
Author(s) -
K. M. Anwarul Islam,
Orobah Ali Barghouthi
Publication year - 2017
Publication title -
international journal of islamic banking and finance research
Language(s) - English
Resource type - Journals
eISSN - 2576-4144
pISSN - 2576-4136
DOI - 10.46281/ijibfr.v1i1.35
Subject(s) - islam , islamic banking , risk management , business , financial services , investment (military) , finance , profit (economics) , profit sharing , risk analysis (engineering) , actuarial science , accounting , economics , philosophy , theology , politics , political science , law , microeconomics
The financial services industry of Islam consists of an increasingly vast number of institutions, such as investment and commercial banks, investment companies and mutual insurance companies. In Islamic banks effective risk management deserves special attention. However, it has numerous drawbacks that are required to be understood better. Risk management is about the attitude towards paying off and the strategies in dealing with them and the risks associated with it in relation to modern banking. As an operational problem, risk management is about the classification and identification of methods, processes and risks in banks to supervise, monitor and measure them.In comparison to conventional banks, Islamic banks face big difficulties in identifying and managing risks due to bigger complexities emerging from the profit loss sharing concept and nature of particular risks of Islamic financing. This research investigates in detail the need for risk management in Islamic bank (Ilias, S. E. B. 2012).