Training Regulation and Supervision of Islamic Banks

Training Regulation and Supervision of Islamic Banks

INTRODUCTION

The main objective of this course is to provide the participants with a comprehensive understanding of the prudential regulation and supervision of Islamic Banks considering their unique characteristics. It discusses the international banking standards from Basel Committee and IFSB and analyses the country approaches to regulating and supervising Islamic banks. The course identifies the various type of risks associated with Islamic banking and explains the supervisory processes including Shari’ah governance, consumer and investor protection and stress testing. The course also teaches the main components of the Basel III principles with their effects on Islamic Banks and examines the financial safety nets and resolution of Islamic banks through case studies particularly on deposit insurance schemes and liquidity management facilities by central banks.

PROGRAMME OBJECTIVES

• Broad understanding of the prudential regulation and supervision of Islamic banks both in the international and national level
• Learning the management of unique risks in Islamic banks
• Analyzing Basel III and IFSB 15 capital adequacy requirements 
• Understanding the supervisory process including Shari’ah governance, consumer and investor protection and stress-testing
• Discovering the new approaches on deposit insurance, central bank liquidity facilities and resolution

WHO SHOULD ATTEND?

• Financial managers
• Financial controllers
• Finance department heads, chief financial officers
• Accounting managers, senior finance officers, accountants
• Finance staff and analysts 

PROGRAM OUTLINE

• • Regulation and supervision of Islamic banks: objectives, principles, components and models
  • Legal foundations for regulation and supervision of Islamic banks
  • Understanding the balance sheet and income statement of Islamic banks 
  • Prudential standards and regulations for Islamic banks
  • Country approaches to regulating and supervising Islamic banks 

• • Risk exposures to Islamic banks
  • Risk management in Islamic finance: risk sharing vs. risk transferring
  • Application of conventional risks to Islamic banks
  • Unique risks for Islamic banks
  • Key risks in main Islamic financial products

• • Basel III Principles and IFSB 15
  • New capital definitions
  • Capital buffers
  • Liquidity and leverage ratios
  • Calculation of capital adequacy requirement for Islamic banks

• • Off-site surveillance and on-site examination of Islamic banks
  • Regulation of corporate and sharia governance in Islamic banks
  • Consumer protection, investor protection and market conduct
  • Stress-testing Islamic banks 
  • Challenges and capacity building for regulators and supervisors

• Financial soundness indicators for Islamic banks 
• Deposit insurance schemes for Islamic banks
• Islamic perspective on lender of last resort (LOLR)
• Instruments by central banks as LOLR
• Resolution of distressed Islamic banks