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4.4.2.1 Turkish Banking Sector.................................................................................................................................................................... 76 4.4.2.2 Overview of Turkish Banking Sector Performance ............................................................................................................ 76 4.4.2.3 Risk Matrices......................................................................................................................................................................................... 84 4.4.3 Kingdom Of Saudi Arabia (K.S.A.) ................................................................................................................................................... 87 4.4.4 United Arab Emirates (UAE) ............................................................................................................................................................. 90 4.4.4.1 U.A.E. Banking Sector ........................................................................................................................................................................ 90 4.4.4.2 Risk Matrices......................................................................................................................................................................................... 90 4.4.5 Bangladesh................................................................................................................................................................................................. 93 4.4.5.1 Bangladesh Banking Sector............................................................................................................................................................ 93 4.4.5.2 Risk Matrices......................................................................................................................................................................................... 94 4.4.6 Tunisia.......................................................................................................................................................................................................... 97 4.4.6.1 Tunisian Banking Sector.................................................................................................................................................................. 97 4.4.6.2 Risk Matrices......................................................................................................................................................................................... 97 CHAPTER 5: SURVEY OF RISK MANAGEMENT PRACTICES OF ISLAMIC FINANCE INSTITUTIONS OIC MEMBER COUNTRIES.............................................................................................................................................................101 5.1 UNDERSTANDING OF RISK IN ISLAMIC FINANCIAL INSTITUTIONS (IFIS)..................................................101 5.1.1 Dynamics of Risk Management in Islamic Contracts...........................................................................................................101 5.1.2 Methodology............................................................................................................................................................................................107 5.2 RISK PERCEPTION ...........................................................................................................................................................107 5.2.1 Risks in Different Modes of Financing ........................................................................................................................................107 5.2.2 Major Challenges Facing IFIS ..........................................................................................................................................................110 5.3 RISK REPORTING .............................................................................................................................................................111 5.4 RISK MANAGEMENT ENVIRONMENT........................................................................................................................112 5.5 RISK MEASURING AND MANAGEMENT TECHNIQUES.........................................................................................113 5.6 RISK MONITORING ..........................................................................................................................................................114 5.7 INTERNAL AUDIT AND CONTROL ..............................................................................................................................116 5.8 EXTERNAL CONTROLS AND LEGAL SYSTEM ..........................................................................................................118 5.9 ARE IFIS HAPPY WITH EXISTING RM SYSTEM? ....................................................................................................118 5.10 REACHING THE OBJECTIVES OF SHARI’AH ..........................................................................................................119 5.11 CONCLUSION....................................................................................................................................................................121 CHAPTER 6: SUMMARY AND POLICY RECOMMENDATIONS....................................................................................123 6.1. RISK MITIGATION AND REGULATION IN ISLAMIC FINANCE...........................................................................123 6.2 SHARIAH HARMONIZATION IN PRODUCT DEVELOPMENT..............................................................................124 6.3 DEVELOPING SUPPORT INFRASTRUCTURE AMONG MUSLIM COUNTRIES ................................................125