Principles of Islamic banking and finance/PIBF200

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Part A: Course specification


  • OERu course name: Principles of Islamic banking and finance
  • Level: 2nd year Bachelors
  • Notional learning hours: 120
  • Micro-courses Three micro courses of 40 hours each
    1. Contextual background of Islamic banking and finance (PIBF201)
    2. Islamic banking (PIBF202)
    3. Non-banking Islamic financial institutions (PIBF203)
  • OERu course codes: PIBF201, PIBF202, PIBF202
  • OERu assessing institutions: HBSMU
  • Micro-credential options: No
  • OERu mode of study: Self-directed study or cohort-based independent study with peer-learning support.

Course aim

(Comment.gif: Please provide overall course aim --Wayne Mackintosh, OER Foundation, New Zealand (talk) 00:32, 31 December 2016 (UTC))

Learning outcomes

(Comment.gif: Please formulate three or four overarching learning outcomes for each micro-course. These are used to align with the assessment section - --Wayne Mackintosh, OER Foundation, New Zealand (talk) 01:34, 31 December 2016 (UTC)--Wayne Mackintosh, OER Foundation, New Zealand (talk) 01:34, 31 December 2016 (UTC))

Indicative content

  • Key elements of Islamic jurisprudence
  • Islamic economic environment
  • Rationale for Islamic finance: Riba, Gharar and mysir
  • Fixed income Islamic modes of finance
  • Variable income Islamic modes of finance
  • Key differences between Islamic and conventional banking
  • Islamic banking products
  • Structure and operations of Islamic banks
  • Financial reporting in Islamic banks
  • Present status of Islamic banking industry, challenges and future prospects
  • Takaful: Islamic insurance
  • Sukuk: Islamic Bonds
  • Investment in stocks
  • Portfolio management under Islamic finance

Assessment and credit transfer options

Hamdan Bin Mohammed Smart University

Assessment type Learning outcomes Details Weighting Completion requirements
Challenge exam LO1, LO2, LO3 100% ?? - Passmark?


Part B: Detailed objectives

Micro-course structure

This course introduces fundamentals of Islamic banking and finance, a financial system that follows the principles and laws of the Islamic Sharia. The course comprises three micro-courses.

Micro 1: Contextual background of Islamic banking and finance

This micro-course provides an overview of basic features and goals of an Islamic economy. It explains the rationale for establishing an Islamic banking and financial system; the avoidance of riba (interest), gharar (uncertainty or deceptive features of business transaction), and mysir (excessive speculation). Finally, this unit explains different modes of Islamic finance that have been developed to avoid interest.

Learning objectives

  1. Summarize key elements of Islamic jurisprudence
  2. Explain the background and rationale for Islamic banking and finance
  3. Distinguish different modes of Islamic financial transactions

Micro 2: Islamic banking

This micro-course provides an overview of Islamic banking industry: its origin, current status and future. It then elucidates different types of Islamic banking products and their utilization. It explains the role of Shari’ah Boards that validates individual Islamic banks’ products, procedures and operations. The advisory function of Islamic Financial Services Board (IFSB) and Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) are also explained. Finally, this unit discusses the achievements and shortcomings of this industry and the challenges and prospects it faces in the future.

Learning objectives

  1. Analyze distinctive modus operandi of Islamic banks
  2. Explain legal and regulatory environment of Islamic banks
  3. Analyze current challenges & future prospects of Islamic banking

Micro 3: Non-banking Islamic financial institutions

This micro-course focuses on the non-banking sector; mainly Islamic insurance and capital markets. It explains the structure, management and operations of Islamic insurance which is called Takaful. Then it discusses Islamic bonds or Sukuks which has recently seen a tremendous growth around the world. In addition, it highlights the issues related to investment in stocks from an Islamic perspective. Finally, portfolio management and hedging under Islamic finance are discussed.

Learning objectives

  • Explain the structure and management of Islamic insurance
  • Categorize different types of Islamic bonds (Sukuk)
  • Distinguish between conventional and Islamic approaches to investment and portfolio management

Course links (if available)