Risk Management in Islamic and Conventional Banks: A Differential Analysis
Amanat Ali Jalbani
Shaheed Zulfikar Ali Bhutto Institute of Science and Technology (SZABIST)
Salman Ahmed Shaikh
Institute of Business Administration; IBA Karachi
Journal of Independent Studies and Research, Vol. 7, No. 2, pp. 67-70, July 2009
Islamic banking is interest-free banking which makes it necessary for Islamic banks to take active part in the operations of the business, i.e. share profits as well as losses. Banks including Islamic banks prefer to take minimum risk. On the surface, it may seem that Islamic banks face more risk and hence, will have more volatile or even negative returns on their assets.
This paper analyzes the risk management procedures of Islamic banks by giving a differential analysis of risk management discussing only the unique characteristics of risk management in Islamic Banking. The usual credit assessment procedures and BASEL are not discussed. This paper looks at the comparative performance of Islamic banks and conventional banks by using ROE as the benchmark.
Number of Pages in PDF File: 13
Keywords: Risk management, commercial banking, Islamic banking, price risk
JEL Classification: G3, G32, G21Accepted Paper Series
Date posted: January 3, 2010
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo8 in 0.828 seconds