Islamic Banking Products and Operations Course

Islamic banking is banking carried out under Shariah rules, where a bank earns returns through trade, leasing and partnership contracts instead of interest, and shares or bears the risks those contracts carry. This five-day course on Islamic banking products and operations is for bankers and ends with each delegate preparing a product review file for one financing product. Blackbird Training Centre runs this course on Islamic banking products and operations.

Introduction

The course is built on two sets of standards. The AAOIFI standards, issued by the Accounting and Auditing Organization for Islamic Financial Institutions, cover Shariah rules, accounting and governance for Islamic banks. The IFSB standards, issued by the Islamic Financial Services Board, give prudential guidance on risk management and Shariah governance. The level is practitioner: delegates work in or alongside banks and come to understand how each product and process runs from the inside. Teaching uses product walkthroughs and case studies drawn from retail, corporate and treasury banking, following each contract from application to settlement.

Course Objectives

• Distinguish Islamic from conventional banking and explain how the ban on riba changes the way a bank earns its return.
• Compare murabaha with ijarah and select the contract that fits a customer's asset finance need.
• Distinguish qard current accounts from mudarabah investment accounts and interpret what each means for depositors.
• Apply IFSB guidance to identify credit, liquidity, profit rate and displaced commercial risk in a bank's book.
• Interpret the roles of the Shariah supervisory board and internal Shariah review when a new product is approved.
• Justify the operational steps that keep a financing transaction compliant, from asset ownership to final payment.

Target Audience

• Relationship and branch bankers who sell financing and deposit products, deciding which contract suits each customer.
• Operations and credit administration staff, judging whether each transaction step meets the contract's Shariah conditions.
• Risk and treasury staff in Islamic banks or windows, choosing how to manage liquidity and profit rate exposure.
• Product development and Shariah compliance staff, judging whether a proposed product structure can be approved.
• Conventional bankers moving into Islamic banking, deciding how familiar products map to Shariah-compliant equivalents.

Course Outline

Day 1: Principles Behind an Islamic Bank

• Islamic vs Conventional Banking: Profit-and-Loss Sharing Compared With Interest-Based Intermediation
• Islamic Economics Principles: Asset Backing, Risk Sharing and Real Economic Activity
• Riba, Gharar and Maysir: Three Prohibitions and How They Shape Bank Contracts
• Growth of Islamic Banking: Historical Development and Present Global Market Footprint
• Islamic Bank Balance Sheet: How Funding Sources and Financing Assets Fit Together

Day 2: Financing Products in Practice

• Murabaha vs Ijarah: Cost-Plus Sale Compared With Leasing for Asset Finance
• Murabaha Operations: Purchase, Possession and Sale Steps in Trade and Vehicle Finance
• Ijarah Muntahia Bittamleek: Lease Ending in Ownership for Home and Equipment Finance
• Musharakah and Diminishing Musharakah: Joint Ownership Partnerships for Projects and Property
• Mudarabah Financing: Capital Provider and Entrepreneur Roles With Profit-Sharing Ratios

Day 3: Deposits, Liquidity and Market Products

• Qard Current Accounts vs Mudarabah Investment Accounts: Guaranteed Compared With Profit-Sharing Deposits
• Wakalah Deposits and Profit Distribution: Agency Arrangements and Profit Equalisation Reserves
• Liquidity Management Tools: Interbank Commodity Murabaha, Sukuk Holdings and Their Limits
• Sukuk Structures: Ijarah and Mudarabah Sukuk Issuance Seen From the Bank
• Takaful Models: Wakalah and Mudarabah Arrangements and Links With Bank Distribution

Day 4: Risk Management in an Islamic Bank

• Credit Risk vs Displaced Commercial Risk: Counterparty Default Compared With Pressure on Depositor Returns
• Specific Risk Exposures: Shariah Non-Compliance, Asset Ownership and Equity Investment Risk
• Credit Assessment of Shariah-Compliant Products: Murabaha Receivables and Ijarah Asset Risk
• Market and Profit Rate Risk: Benchmark Movements and Mismatched Financing Tenors
• IFSB Risk Management Guidance: Principles for an Islamic Bank's Risk Framework

Day 5: Shariah Governance and Product Review

• Shariah Supervisory Board vs Internal Shariah Review: Approving Products Compared With Checking Transactions
• AAOIFI Standards: Testing the Murabaha and Ijarah Products Against Shariah Requirements
• Corporate Governance and Shariah Audit: Auditing the Deposit and Financing Processes Covered
• Islamic Fintech and Digital Banking: Current Challenges, Opportunities and Emerging Trends
• Bank Case Study and Product Review File: Contract Flow, Shariah Checks and Risk Map

Skills You Will Gain

• Contract selection for asset finance
• Murabaha transaction sequencing
• Diminishing musharakah structuring
• Deposit product classification
• Displaced commercial risk assessment
• Shariah non-compliance risk control
• Shariah audit evidence review

Why Attend This Course

• From describing Islamic products in general terms to explaining each step a murabaha or ijarah transaction must follow.
• From treating all deposits alike to telling customers how a qard account differs from a profit-sharing investment account.
• From applying conventional risk categories to recognising risks particular to Islamic banks, such as displaced commercial risk.
• From relying on others for Shariah questions to completing a product review file with contract flow, Shariah checks and a risk map.

Conclusion

Seen from inside the bank, Islamic banking is a set of trade, lease and partnership contracts that must be executed in the right order, by the right parties, with real assets behind them. The course draws the distinctions between murabaha and ijarah, between guaranteed and profit-sharing deposits, and between Shariah board approval and day-to-day Shariah review. It suits bankers who handle or oversee Islamic products, rather than readers seeking a broad market overview of Islamic finance and investment.

Course FAQs

What is Islamic banking?

Islamic banking is a form of banking that follows Shariah rules, avoiding interest, excessive uncertainty and speculation. Banks provide finance through sale, lease and partnership contracts tied to real assets, and depositors share in profits rather than receiving fixed interest.

What is the difference between murabaha and ijarah in Islamic banking?

Murabaha is a sale in which the bank buys an asset and sells it to the customer at a disclosed mark-up, usually paid in instalments. Ijarah is a lease: the bank keeps ownership and the customer pays rent, sometimes with ownership passing at the end.

Which standards does Islamic banking products and operations training follow?

The course follows the AAOIFI standards for Shariah rules, accounting and governance, and IFSB guidance for risk management and Shariah governance systems in institutions offering Islamic financial services.

Is Islamic banking products and operations training right for a relationship manager?

Yes. A relationship manager who offers financing or deposit products gains the knowledge to match contracts to customer needs and explain how each one works. Readers interested mainly in sukuk markets or investment funds may prefer a broader Islamic finance course.

What do delegates produce in Islamic banking products and operations training?

Each delegate prepares a product review file for one financing product, setting out its contract flow step by step, the Shariah conditions checked at each stage and a map of the credit, operational and compliance risks involved.