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IFSB Risk Management for Islamic Banks and Takaful Training Course

Equips risk, ALM and treasury teams in Islamic banks and takaful operators to apply IFSB standards to capital, liquidity, rate-of-return and Shariah risk.

BFI · Islamic Banking & FinanceAll Levels#2988ClassroomEnglish , Arabic
Duration
5 Days
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Free substitution at any time · 30+ days' notice: full refund minus 10%. Cancellation policy

Course Overview

IFSB Risk Management for Islamic Banks and Takaful Training Course is a specialist, risk-only programme for risk managers, asset and liability management (ALM) teams, and treasury professionals who measure, control, and report the risks that are unique to Islamic financial institutions. Rather than revisiting Islamic contracts or Shariah governance structures, the course concentrates on how the standards and guiding principles of the Islamic Financial Services Board (IFSB) translate into risk limits, capital calculations, liquidity buffers, and board-level risk reporting. The balance sheet of an Islamic bank behaves differently from that of a conventional bank. Assets are asset-based or equity-based, while a large share of funding comes from profit-sharing investment accounts (PSIA) whose holders share in the results but expect competitive returns. This creates rate-of-return risk, displaced commercial risk, and pressure on shareholders' profits whenever asset yields lag market benchmarks. Profit equalization and investment risk reserves, the alpha factor in capital adequacy, and the scarcity of Shariah-compliant liquid assets all demand techniques that conventional risk models do not provide. Participants will work through contract-specific credit and market risk in murabaha, ijarah, istisna, salam, musharakah and mudarabah exposures, sukuk price and structure risk, the IFSB approach to capital adequacy and the supervisory review process, Islamic liquidity risk with its limited funding instruments, Shariah non-compliance risk as a distinct operational risk, and the separation of participant and shareholder funds in takaful. Each day ends with a practical exercise built on realistic balance sheets, profit distribution tables, sukuk portfolios, and stress scenarios. Participants leave with working tools, including a rate-of-return gap report, a reserve policy outline, a liquidity stress test, and an integrated risk dashboard that they can adapt to their own institution and regulatory environment.

Learning Objectives

  • Analyze the distinctive risk profile of Islamic bank and takaful balance sheets.
  • Apply IFSB guiding principles on risk management to the design of risk appetite, limits, and risk reporting.
  • Measure rate-of-return risk in the banking book using repricing gap and earnings-sensitivity analysis.
  • Evaluate displaced commercial risk and the role of profit equalization and investment risk reserves.
  • Assess contract-specific credit and market risk across financing, equity, and sukuk exposures.
  • Calculate capital requirements under the IFSB capital adequacy approach, including the treatment of PSIA.
  • Design liquidity risk frameworks that reflect the limited supply of Shariah-compliant liquid assets.
  • Identify, quantify, and monitor Shariah non-compliance risk as part of operational risk management.
  • Distinguish the risks of participant and shareholder funds in takaful operations.
  • Build stress tests and integrated risk reports for board and supervisory decisions.

Who Should Attend

This course is designed for chief risk officers, risk managers, market, liquidity and credit risk analysts, ALM managers, heads of treasury and treasury dealers, capital planning teams, financial controllers, model validators, and takaful actuaries who are responsible for measuring and reporting risk in Islamic financial institutions. It is particularly valuable for professionals working in full-fledged Islamic banks, Islamic windows of conventional banks, takaful and retakaful operators, Islamic investment and asset management companies, central banks, banking supervisors, insurance regulators, and ministries of finance overseeing Islamic finance. Teams preparing for supervisory reviews or redesigning rate-of-return, liquidity, or reserve policies will benefit most. It is equally relevant for internal auditors, compliance officers, and finance staff who review risk models, capital calculations, or PSIA disclosures and need a firm grasp of Islamic-specific risk measurement.

Learning Outcomes

  • By the end of this course, participants will be able to:
  • Explain how Islamic balance sheets generate risks conventional models miss.
  • Translate IFSB risk management principles into risk appetite statements, limits, and policies.
  • Produce rate-of-return gap and earnings-sensitivity reports for the banking book.
  • Recommend profit distribution and reserve policies that manage displaced commercial risk.
  • Assess credit, equity investment, and market risk for each financing contract and sukuk holding.
  • Calculate capital adequacy ratios that correctly reflect PSIA and the alpha factor.
  • Design liquidity buffers, stress tests, and contingency funding plans suited to Islamic institutions.
  • Quantify Shariah non-compliance risk events and track them through key risk indicators.
  • Evaluate the solvency of takaful participant funds and the exposure of shareholders.
  • Prepare integrated risk reports for boards and supervisors.

Course Outline

Course Outline:

Day 1

The Islamic Risk Profile and IFSB Principles

  • How Islamic balance sheets differ from conventional ones
  • Risk transmission from PSIA funding to financing assets
  • IFSB guiding principles on risk management and their supervisory use
  • Risk appetite, limits, and the roles of the risk and ALM functions
  • Practical application: Mapping a balance sheet into risk exposures by contract
Day 2

Rate-of-Return and Displaced Commercial Risk

  • Repricing gaps and earnings sensitivity in the banking book
  • Benchmark pressure, return smoothing, and displaced commercial risk
  • Restricted and unrestricted PSIA, mudarib share, and loss absorption
  • Profit equalization and investment risk reserves: policy and disclosure
  • Practical application: Simulating profit distribution under falling yields
Day 3

Contract Credit, Market, and Sukuk Risk

  • Credit risk across murabaha, ijarah, istisna, and salam stages
  • Equity investment risk in musharakah and mudarabah
  • Commodity, foreign exchange, and leased asset price risk
  • Asset-based versus asset-backed sukuk, price, and rating risk
  • Practical application: Risk-rating a sukuk and diminishing musharakah portfolio
Day 4

Capital Adequacy and Islamic Liquidity Risk

  • IFSB capital adequacy approach, contract risk weights, and the alpha factor
  • Internal capital assessment, supervisory review, and stress testing
  • Liquidity risk with scarce Shariah-compliant high-quality liquid assets
  • Liquidity coverage and net stable funding ratios, and contingency funding
  • Practical application: Liquidity stress testing a PSIA withdrawal scenario
Day 5

Shariah Non-Compliance, Takaful, and Risk Reporting

  • Shariah non-compliance events, loss quantification, and key risk indicators
  • Participant and shareholder funds, deficits, and qard support in takaful
  • Enterprise stress testing across return, liquidity, and capital
  • Risk disclosure to account holders, boards, and supervisors
  • Practical application: Presenting an integrated risk dashboard to a mock board

Upcoming Dates

Selected date

Abuja · 18 – 22 Oct 2027 · Classroom

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CityDatesPrice per ParticipantEarly Bird
LisbonScheduled
2 – 6 Nov 2026€5,400—
LondonScheduled
9 – 13 Nov 2026€5,600—
MadinahScheduled
9 – 13 Nov 2026€4,200—
MadridScheduled
16 – 20 Nov 2026€5,400—
MakkahScheduled
23 – 27 Nov 2026€4,200€3,780until 2 Nov
ManamaScheduled
23 – 27 Nov 2026€4,700€4,230until 2 Nov
MilanScheduled
30 Nov – 4 Dec 2026€6,000€5,400until 9 Nov
MuscatScheduled
7 – 11 Dec 2026€5,300€4,770until 16 Nov
OnlineScheduled
13 – 17 Dec 2026€1,700€1,530until 23 Nov
ParisScheduled
14 – 18 Dec 2026€5,700€5,130until 23 Nov
RiyadhScheduled
21 – 25 Dec 2026€4,200€3,780until 30 Nov
AbujaScheduled
28 Dec 2026 – 1 Jan 2027€5,100€4,590until 7 Dec
SalalahScheduled
28 Dec 2026 – 1 Jan 2027€5,300€4,770until 7 Dec
AccraScheduled
4 – 8 Jan 2027€5,100€4,590until 14 Dec
AmmanScheduled
10 – 14 Jan 2027€3,100€2,790until 21 Dec
AmsterdamScheduled
11 – 15 Jan 2027€5,400€4,860until 21 Dec
BakuScheduled
18 – 22 Jan 2027€4,800€4,320until 28 Dec
BangkokScheduled
25 – 29 Jan 2027€6,100€5,490until 4 Jan
BarcelonaScheduled
25 – 29 Jan 2027€5,400€4,860until 4 Jan
BeirutScheduled
31 Jan – 4 Feb 2027€4,000€3,600until 11 Jan
CairoScheduled
7 – 11 Feb 2027€3,300€2,970until 18 Jan
Cape TownScheduled
8 – 12 Feb 2027€5,100€4,590until 18 Jan
DammamScheduled
14 – 18 Feb 2027€4,200€3,780until 25 Jan
DohaScheduled
21 – 25 Feb 2027€4,400€3,960until 1 Feb
DubaiScheduled
28 Feb – 4 Mar 2027€4,400€3,960until 8 Feb
GenevaScheduled
1 – 5 Mar 2027€6,300€5,670until 8 Feb
IstanbulScheduled
8 – 12 Mar 2027€4,700€4,230until 15 Feb
JeddahScheduled
14 – 18 Mar 2027€4,200€3,780until 22 Feb
KigaliScheduled
15 – 19 Mar 2027€5,100€4,590until 22 Feb
Kuala LumpurScheduled
22 – 26 Mar 2027€4,400€3,960until 1 Mar
AbujaScheduled
18 – 22 Oct 2027€5,100€4,590until 27 Sept

Available in: Istanbul · Dubai · London · Riyadh · Doha · Amsterdam

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