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Ask a conventional banker exactly what is Islamic banking. He will probably mumble something about religion. He will then say well they cannot charge interest but they use something else which is the same thing. This ‘something else’, incidentally, is never defined. He will then move on to describe Islamic banking as being about smoke and mirrors. To conclude he will then profoundly announce that, with a few tweaks, it is what he does every day anyway. And that, to him, is the end of it. But, more realistically, what exactly is Islamic banking all about?
Islamic financial institutions are those that are based, in their objectives and operations, on Qur’anic principles. They are thus set apart from ‘conventional’ institutions, which have no such religious preoccupations. Islamic banks provide commercial services which comply with the religious injunctions of Islam. Islamic banks provide services to their customers free from interest, (the Arabic term for which is riba), and the giving and taking of interest is prohibited in all transactions. This prohibition makes an Islamic banking system differ fundamentally from a conventional banking system.
This rejection of interest poses the central question of what replaces the interest rate mechanism in an Islamic framework. Financial intermediation is at the heart of modern financial systems. If the paying and receiving of interest is prohibited, how do Islamic banks operate? Here Profit and Loss Sharing (PLS) comes in, substituting profit-and-loss-sharing for interest as a method of resource allocation and financial intermediation.
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Islamic banking is now one of the fastest growing sectors of the financial market place, largely driven by the new wealth of the Middle East and by the need for Muslims, representing one-fifth of the world’s population, to find islamically acceptable financial products.
At the centre of the demand for expertise in Islamic financing lies the long term wealth represented by the future oil and gas earnings of the Middle East. The oil and gas reserves for several of the large Middle East countries are conservatively estimated to last for well over 100 years, a figure which is being continuously revised upwards. The wealth of the region is increasingly being channelled into Islamically structured financing.
Islamic financial institutions currently operate in more than 75 countries with assets exceeding US$ 400 billion. This represents a 45 fold growth rate since 1982. However Islamic finance, based as it is on the fact that financial activities have to be interest free, poses many challenges for anyone seeking to unravel its workings.
However the pace at which Islamic banking and finance training courses are being developed, to match this growth in demand, is slow, very slow, with the availability of world class quality training in the subject area lagging far behind that of demand.
The training courses listed below are designed to break through the mysteries and complexities of what, to an outsider, can sometimes be seen as a myriad of puzzling banking principles.
Course Director
BRIAN KETTELL has recently returned from working in Bahrain as an Adviser to the Bahrain Monetary Agency (the Central Bank of Bahrain). His work involved him in pioneering many of Bahrain’s recent innovations in Islamic banking. Bahrain prides itself on having the world’s largest concentration of Islamic banks and financial institutions.
While working at the BMA Brian wrote
Islamic Banking and Finance in the Kingdom of Bahrain which received very favourable
reviews.
Where and when are the courses taught?
The courses are taught IN-HOUSE, world wide at the convenience of the client. They can be tailor-made to the clients requirements.
How are the courses delivered?
Participants can choose between two possible Training Routes for the course delivery.
Training Route One
Training Route One consists of a series of courses ranging from 1 to 5 days in duration. The course contents are listed below. You simply let the Course Director know which course you require.
Training Route Two
Training Route Two provides a more flexible system of choice where the participants can choose from the variety of modules listed below and create their own training programme, based on their own requirements. The participants simply choose the modules they are most interested in and the Course Director puts them together to make up the programme.
For both Training Route One and Training Route Two, the emphasis is on case studies, practical exercises and real world applications.
Both training routes are taught at your own institution enabling any preferences you have to be built into the course programme.
What is an Islamic Banking Module?
These are 90 minute modules. There is a short test at the end of each module. The modules are designed as stand alone, although each one can also be seen as prerequisite for the succeeding one. No prior knowledge of the subject area is assumed on the part of participants. Full documentation comes with each module.
