IC312-Islamic Banking Practices

Module Provider: ICMA Centre
Number of credits: 20 [10 ECTS credits]
Terms in which taught: Spring term module
Non-modular pre-requisites:
Modules excluded:
Current from: 2021/2

Module Convenor: Dr Mohd Pisal Zainal
Email: m.p.zainal@reading.edu.my

Type of module:

Summary module description:

This module introduces basic concepts, principles, products and services offered by the Islamic banking system. It equips the students with a working knowledge of the products and services, either retail or corporate, offered by the Islamic banking system and familiarize the students with regulatory and legal frameworks governing the conventional and Islamic banking systems. The approach is from the dual-banking perspective.

This module is delivered at University of Reading Malaysia.


This module provides students with a working knowledge of principles, products and services, and treasury functions and operation of an Islamic bank. In achieving these objectives, the students will be exposed to the structure of the Islamic financial system and the shari'ah and legal frameworks of the Islamic financial system.

Assessable learning outcomes:

At the end of the course, students are expected to be able to:

  • discuss the principles of Islamic finance.

  • compare and contrast the legal and regulatory frameworks governing Islamic and conventional banking systems.

  • analyse the balance sheet (T-account) of an Islamic bank – the asset and liability products offered by an Islamic bank.

  • critically analyse the importance of Islamic interbank money market in mana ging liquidity risk.

  • compare and contrast various financial services and channel management of an Islamic bank.

  • discuss the corporate financing instruments/products offered by Islamic banks.

  • critically evaluate the value-based intermediation (VBI) implementation within the Islamic banking industry.

Additional outcomes:

Information gathering skills, working in team as well as presentation skills.

Outline content:

Introduction to principles of Islamic finance

  • Types of contracts in Islamic banking system

  • Shari’ah and Regulatory Frameworks: Islamic and conventional banking systems

  • The structure of Islamic financial system: Roles and functions of an Islamic bank

  • Islamic Banking Operation: Liability side: Types of deposit products

  • Islamic Banking Operations:- Asset side: Types of financing products
  • Corporate Financing: Trade Financing

  • Financial Services and Channel Management · Treasury functions and operations – Part I

  • Treasury functions and operations – Part II · The Islamic Interbank money market

  • Managing Islamic banking institutions · Risk management for Islamic banking system

  • Deposit Insurance System

  • Application of value-based intermediation within Islamic financi al services industry

Global context:

This module covers the regulatory frameworks from the global perspective, since Islamic banking and other related financial institutions exist in more than sixty countries globally. However, the module will draw heavily from the experience of Malaysia in terms of the depth and width of products offering and sound regulatory frameworks.

Brief description of teaching and learning methods:

Teaching is delivered through a combination of lectures, tutorials and class activities such as kahoot and mentimeter. The course broadly requires two hours of lectures per week and supported by tutorial classes once in every fortnight. For tutorial classes, students are required to work in groups.

Contact hours:
  Autumn Spring Summer
Lectures 20
Seminars 10
Guided independent study:      
    Wider reading (independent) 60
    Wider reading (directed) 50
    Exam revision/preparation 15
    Advance preparation for classes 10
    Preparation for presentations 4
    Preparation for seminars 5
    Revision and preparation 15
    Group study tasks 4
    Essay preparation 5
    Reflection 2
Total hours by term 0 168 32
Total hours for module 200

Summative Assessment Methods:
Method Percentage
Written exam 50
Written assignment including essay 35
Oral assessment and presentation 15

Summative assessment- Examinations:

One two-hour, closed-books, closed-noted final examination.

Summative assessment- Coursework and in-class tests:

One in-class presentation which is due in week 8, and the presentation will be carried out in weeks 8 & 9 (subject the number of students registered for the module) – 15% of the final grade; and

One group assignment (~2,500 words) which is due in week 8 – 35% of the final grade.

Formative assessment methods:

Constructive alignments are given during tutorial classes.

Discussions and feedback on the draft of oral presentation.

Discussions and feedback on the draft of the assignments prior to final submission.

Penalties for late submission:

The Module Convener will apply the following penalties for work submitted late, in accordance with the University policy.

  • where the piece of work is submitted up to one calendar week after the original deadline (or any formally agreed extension to the deadline): 10% of the total marks available for the piece of work will be deducted from the mark for each working day (or part thereof) following the deadline up to a total of five working days;

  • where the piece of work is submitted more than five working days after the original deadline (or any formally agreed extension to the deadline): a mark of zero will be recorded.

The University policy statement on penalties for late submission can be found at: http://www.reading.ac.uk/web/FILES/qualitysupport/penaltiesforlatesubmission.pdf

You are strongly advised to ensure that coursework is submitted by the relevant deadline. You should note that it is advisable to submit work in an unfinished state rather than to fail to submit any work.

Assessment requirements for a pass:
A weighted average of 40%

Reassessment arrangements:

To re-sit the examination, if the weighted average is below 40%.

Additional Costs (specified where applicable):

a. Ramli, Razli, Mohammad Khairi Saat & Haryani Aminuddin. 2014. Islamic Banking Practices: From the Practitioner’s Perspective. 2nd ed. Kuala Lumpur: IBFIM.

b. Saiti, Burhan. 2016. Islamic Banking Operations. Kuala Lumpur: International Council of Islamic Finance Educators.


Last updated: 8 April 2021


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