Course Outline Page 1

University of Management and Technology

Course Outline
Course Code: IB -655 Course Title: International Islamic Banking


Program

MS Islamic Banking and Finance (MS IBF)

Credit Hours

03

Duration

15 weeks (15 sessions)

Prerequisites

N/A

Resource Person

Mr. Muhammad Mahmood Shah Khan

Counseling Timing

(Room# 1N-11)

Monday Thursday (11:00 AM 3:00 PM)

Contact



Chairman/Director signature.
Deans signature Date.
Course Outline Page 2

Learning Objective:
The recent turbulence in the global financial markets has drawn attention to an alternative
system of financial intermediation: Islamic banking and finance. The rise of Islamic Banking
is a welcome sign. Islamic banking system has emerged as a competitive and a viable
substitute for the conventional banking system during the last three decades. It is
especially true for Muslim world where presently Islamic banking strides at two separate
fronts. At one side, efforts are also underway to cover the entire financial systems in
accordance to Islamic laws (Shariah). At the other side, separate Islamic banks are allowed
to operate in parallel to conventional interest based banks. Pakistan, Indonesia and
Malaysia and other Gulf countries are the good examples of above mentioned approaches.
In this elective course, the first part we will make emphasis on is basic terms and concepts
which shape the foundation for international banking like Balance of Payments, exchange
rate systems and its determinations, factor affecting the trade and capital flows. Secondly
we will go through the financing and investing activities of commercial banks in the
international money and capital markets, the role international financial institutions in
flow of funds.
The next part of the outline will take start from emergence and early development of
Islamic banking in the world. The spreading of Islamic banking in Islamic world i.e. Middle
East, South East Asia, and Far East, will be discussed next. After that the regional centers
(Bahrain, Malaysia and UK) will be discussed.
The third part will comprise the standardization of international Islamic banking functions
with respect to IFSB and AAOFI. After that all types of financing and investing opportunities
available for Islamic banks in the international money and capital market will be discussed.
It will cover all possible money and capital market instruments, in which the whether the
Islamic bank does provide, may provide or may not provide banking facilities to its
national/international clients.
The fourth part of the outline will encompass the role of multilateral agencies like IDB, IMF,
IBRD/World Bank with respect to Islamic banking and Finance. Beside that different
countrys models will be discussed.
The general objective of the course is to provide the students with the knowledge of the
growth and development of Islamic banking among Muslims and the values inherent in this
system of banking. It will also expose the students to the evils in the riba-based banking
system. At the end of the course therefore, the students will be able to:

identify the principles of Islamic economic and banking system;
describe the origin, growth and development of Islamic banking system ;
identify some differences between Islamic and conventional banking systems;
explain the value of Islamic banking;
identify the prospect of Islamic banking in Saudi Arabia, UAE, Indonesia and Pakistan
Course Outline Page 3

Role of multinational agencies in Islamic Banking system
Standardization and Services IFSB and AAOFI

Learning Methodology:
The above-mentioned course objectives will be materialized through different modes of class
interactions i.e.
1. Class Lectures and Handouts
2. Class Discussions, Presentations, Group Activities
3. Case Studies, Seminars and Events Participation
4. Projects/ Term Papers

Assignments/Presentations
All assignments for formal evaluation must be typed and submitted by the specified due dates.
Topics of assignments would be assigned by the course instructor from the given topics. Each
student will be required to make fifteen minutes class presentation on the topic assigned.
Plagiarism is not allowed.

Plagirism
The UMT policy regarding academic honesty and discipline will be strictly enforced. Students who
violate academic integrity in any manner including Plagiarism will necessarily fails the assignment
/ examination in question and may go through further disciplinary procedures. Tardiness and
casual attitude shall be strongly discouraged.











Course Outline Page 4

Grade Evaluation Criteria
Following is the criteria for the distribution of marks to evaluate final grade in
a semester.

Marks Evaluation Marks in percentage

Quizzes 10
Assignments 10
Mid Term 25
Attendance & Class Participation 10
Term Project
Presentations 10
Final exam 35
Total 100



Recommended Text Books:



Reference Books:




Course Outline Page 5

Calendar of Course contents to be covered during semester
Course Code: IB - 655 Course Title: International Islamic Banking

Session #

Lecture Contents
Chapter #
&
Handouts
1 What is Islamic Banking To know about the philosophy and concept of
Islamic Banking and Finance?
Emergence and Role of Islamic Banking and Finance To discuss
that Islamic banking system has emerged as a competitive and a viable
substitute for the conventional banking system during the last three
decades.
Islamic and Conventional Banking: A Comparative Analysis To
differentiate between the Islamic and conventional banking systems
with a view to appreciating the extent of their relevance to economic
growth.

2 Foundation for Islamic Banking To know the foundations for
international banking like International Flow of Funds, Balance of
payment, International Trade Flows, Factors affecting International
Trade Flows, International capital Flows, motives for using international
financial markets and exchange rate systems.

3 International Flow of Funds To know the financing and investing
activities of commercial banks in the international money and capital
markets, and the role international financial institutions in flow of
funds.

4 The Origin, Growth and Development of Islamic Banking System - To
explain the historical background of Islamic banking system and the
level of its development in some countries and regions.
Role of Middle East, South East Asia, and Far East
History of Islamic Banking in Pakistan
History of Islamic Banking in Malaysia
History of Islamic Banking in Bahrain
History of Islamic Banking in UK

5 The Role of Malaysia in Islamic Banking - To identify the roles played by
Malaysia in the development of Islamic Banks. Particular reference shall
be made to Malaysia whose contribution could not be forgotten in the
history of Islamic banking throughout the world. Her Tabung Hajj,
establishment of College of Islamic Banking and Finance, The Kuala
Lumpur Stock Exchange, and the Islamic Capital market shall be vividly
discussed.

6 The Development of Islamic Banking System in some selected
Course Outline Page 6

countries - To identify the rate at which Islamic banking system is being
embraced in some countries like UK and Bahrain, and the extent of
development of the bank in those countries. It is interesting to note that
Islamic banking system has been adopted not only in Muslim dominated
countries, but as well in the UK, Africa, Bahrain and other European
countries.
7 Challenges of Operation of Islamic Banking
The objective of the lecture is to expose students to the problems facing
the operation of Islamic banking system especially in a multi-religious
society. Many challenges and obstacles face the operation of Islamic
banks. Such include lack of a supportive environment, inadequate
regulation and the infant stage of Islamic banking. Others include
absence of liquidity instruments, lack of qualified professionals and non
developed risk analysis and measurement. Also, many banking
regulations which are meant to control the requirements of
conventional banks may pose difficulties for Islamic banks. These and
some other challenges will be discussed with the students.

8 Standardization of International Islamic Banking - To standardization
and harmonization of international Islamic finance practices and
financial reporting in accordance to Shariah standards (AAOFI and IFSB)

9 Standardization of International Islamic Banking - To guide IFs markets
operation and financial reporting on Shariah principle and rules. To
provide IF markets with a standard that can support growth of the
industry.

10 Role of Multilateral Agencies To encompass the role of multilateral
agencies like with respect to Islamic banking and Finance. Beside that
different countrys models will be discussed.

11 Role of Islamic Development Bank (IDB)
12 Role of International Monetary Fund (IMF)
13 Role of IBRD/World Bank
14 Group Presentations
15 Group Presentations