Liquidity Risk Management : A Study of Islamic Financial Institutions in Nigeria

2017 ◽  
Vol 6 (2) ◽  
pp. 58-66
Author(s):  
Tijjani Ridwanlah Adewale ◽  
Nissar Ahmed Yatoo
Keyword(s):  
Risk Management ◽  
Financial Institutions ◽  
Liquidity Risk ◽  
Islamic Financial Institutions

scholarly journals A SUCCINCT ANALYSIS OF MITIGATING LIQUIDITY RISK IN ISLAMIC BANKS IN THE LIGHT OF LIQUIDITY AND RISK MANAGEMENT PRINCIPLES

2019 ◽  
Vol 4 (1) ◽  
pp. 527
Author(s):  
Atharyanshah Puneri ◽  
Naeem Suleman Dhiraj ◽  
Hafiz Benraheem
Keyword(s):  
Risk Management ◽  
Financial Institutions ◽  
Financial Institution ◽  
Real Life ◽  
Liquidity Risk ◽  
Islamic Banks ◽  
Liquidity Management ◽  
Islamic Financial Institutions ◽  
The Subject ◽  
Key Aspects

Liquidity management has been incessantly challenging for the financialinstitutions and especially Islamic financial institutions due to their nature of business. The�convoluted nature of liquidity management impedes the task of Islamic banks in managing�their liquidity efficiently. Given the intricacies of the subject matter, this paper delves into�elaborating the key aspects of liquidity management; subsequently, discusses the�consequences of poor liquidity management and problems inherent in managing the latter by�analyzing the real-life failure of Islamic financial institution as a result identifying the issues that could possibly jeopardize the existence of the Islamic banks. Finally, equipping the�readers with tools to mitigate the liquidity risk.

scholarly journals FINANCING TO DEPOSIT RATIO (FDR) SEBAGAI SALAH SATU PENILAIAN KESEHATAN BANK UMUM SYARIAH (Study Kasus Pada Bank BJB Syariah Cabang Serang)

2016 ◽  
Vol 7 (1) ◽  
Author(s):  
DIDIN RASYIDIN
Keyword(s):  
Qualitative Research ◽  
Risk Management ◽  
Financial Institutions ◽  
Research Method ◽  
Liquidity Risk ◽  
Islamic Banks ◽  
Qualitative Research Method ◽  
Islamic Bank

Abstract. Study on Assessment the Commercial Islamic Bank by Financing to Deposit Ratio (FDR) at BJB Syariah Serang. Islamic bank is a bank that operates without relying on interest. Islamic banks can also be interpreted as financial institutions/ banks operations and products are developed based on the Quran and Hadith. Antonio and Perwataatmadja distinguish two senses, namely the Islamic banks and banks operating with Islamic Shari'a principles. Islamic Bank is a bank that operates with Islamic Shari'a and an ordinance operating refers to the provisions of the Qur'an and hadith. The purpose of this study is to determine how percentage and how does the calculation of Financing to Deposit Ratio of Bank Jawa Barat Syariah at the end of 2013. The method used in this research is descriptive cualitative method. Qualitative research method is a method to investigate an object that can not be measured by numbers or other sizes that are exact. The conclusion of the study is the Financing to Deposit Ratio (FDR) at Bank BJB Syariah is 104.28%. This means that banks liquidity ability to anticipate the needs of liquidity and liquidity risk management is weak is ranked fourth compositeAbstrak. Financing to Deposit Ratio (FDR) Sebagai Salah Satu Penilaian Kesehatan Bank Umum Syariah (Study Kasus Pada Bank BJB Syariah Cabang Serang). Bank syariah adalah bank yang beroperasi tanpa mengandalkan bunga. bank syariah juga dapat diartikan sebagai lembaga keuangan yang operasional dan produknya dikembangkan berdasarkan Al-Quran dan Hadis. Antonio dan Perwataatmadja membedakan dua pengertian, yaitu bank syariah dan bank yang beroperasi dengan prinsip syariat Islam. Bank syariah adalah bank yang beroperasi dengan syariat dan tata cara Islam yang mengacu pada ketentuan Al-Qur'an dan hadits. Tujuan dari penelitian ini adalah untuk menentukan bagaimana persentase dan bagaimana perhitungan Financing to Deposit Ratio Bank Jawa Barat Syariah pada akhir 2013. Metode yang digunakan dalam penelitian ini adalah metode deskriptif analisis kualitatif. Kesimpulan dari penelitian ini adalah Pembiayaan to Deposit Ratio (FDR) di Bank BJB Syariah adalah 104,28%. Ini berarti bahwa kemampuan likuiditas bank untuk mengantisipasi kebutuhan likuiditas dan manajemen risiko likuiditas lemah berada di peringkat keempat.

scholarly journals Islamic Money Market: An Instrument for Managing Liquidity Risk in Islamic Banks

ICR Journal ◽  
2014 ◽  
Vol 5 (2) ◽  
pp. 205-224
Author(s):  
Sekono Abiola Muttalib
Keyword(s):  
Risk Management ◽  
Liquidity Risk ◽  
Money Market ◽  
Islamic Banks ◽  
Financial Instruments ◽  
Short Term ◽  
Money Markets ◽  
Islamic Financial Institutions ◽  
Banking Institutions

The general consensus of financial experts is that liquidity is the lifeblood of any organisation, which is inclusive of Islamic banks. Hence, effective liquidity management is essential for the efficiency of banking institutions and the economy as a whole. The major provider of liquidity is the short-term money market instruments.  Islamic financial institutions just like their conventional counterparts use short-term mobilised deposit funds to finance long-term loans and projects which expose them to asset liability mismatches and thus, are vulnerable to liquidity problems. Addressing the potential liquidity risk due to the cash-flow mismatches requires an efficient and vibrant Islamic money market as it is an essential and integral part of Islamic financial system. It therefore raises the need for developing an Islamic money market where Shari’ah-compliant financial instruments are to be traded and operated based on Shari’ah principles. Although it is considered the surest approach to sound liquidity risk management in Islamic banks, the dilemma that Islamic money markets are facing now is acute shortage of Shari’ah-compliant financial instruments and the controversies surrounding the few available instruments. A successful liquidity risk management therefore requires ensuring well functioning Islamic money markets with some if not all controversies/addressed through embarking on development of new products or promoting innovation in order to enable Islamic banks to compete effectively with their conventional counterparts. Hence, this study attempts to present a better understanding of various Islamic money market instruments, their roles in managing liquidity and their relationship with liquidity risk management.

scholarly journals Risk Management Disclosure In Malaysian Islamic Financial Institutions: Pre- And Post-Financial Crisis

2013 ◽  
Vol 29 (2) ◽  
pp. 419 ◽  
Author(s):  
Rosnadzirah Ismail ◽  
Rashidah Abdul Rahman ◽  
Normah Ahmad
Keyword(s):  
Risk Management ◽  
Financial Crisis ◽  
Financial Institutions ◽  
Islamic Law ◽  
Global Financial Crisis ◽  
Emerging Market ◽  
Risk Disclosure ◽  
Font Size ◽  
Islamic Financial Institutions ◽  
The Global Financial Crisis

<span style="font-family: Times New Roman; font-size: small;"> </span><p style="margin: 0in 0.5in 0pt; text-align: justify; mso-pagination: none; mso-hyphenate: none;" class="MsoNormal"><span style="font-family: Times New Roman;"><span lang="EN-GB" style="color: black; font-size: 10pt; mso-ansi-language: EN-GB; mso-fareast-language: AR-SA; mso-themecolor: text1;">The East Asian financial crisis in 1997 and later the global financial crisis in 2007 and 2008 had a big impact on the corporate world as many companies and financial institutions collapsed during that period.<span style="mso-spacerun: yes;"> </span>Poor governance systems and lack of transparency in reporting including lack of risk reporting and disclosure were blamed as the roots of the problem.<span style="mso-spacerun: yes;"> </span></span><span style="color: black; font-size: 10pt; mso-fareast-language: AR-SA; mso-themecolor: text1;">Conventional financial institutions have widely practiced risk management within their organization, but it is still under-developed in Islamic financial institutions due to new emerging market and unique business structures which are based on Shariah or Islamic law.<span style="mso-spacerun: yes;"> </span>Therefore, t</span><span lang="EN-GB" style="color: black; font-size: 10pt; mso-ansi-language: EN-GB; mso-fareast-language: AR-SA; mso-themecolor: text1;">his study examined the risk management disclosure by all 17 Islamic financial institutions in Malaysia from 2006 to 2009, covering the period before, during, and after the global financial crisis.<span style="mso-spacerun: yes;"> </span>A disclosure checklist consists of mandatory and voluntary items developed to measure the level of risk disclosure.<span style="mso-spacerun: yes;"> </span>The descriptive result shows the risk management disclosure among the Islamic Financial Institutions was satisfactory.<span style="mso-spacerun: yes;"> </span>Analysis for a four year period revealed that the risk disclosure has greatly improved before and after crisis indicating that Islamic Financial Institutions have taken the necessary steps to improve their disclosure.</span></span></p><span style="font-family: Times New Roman; font-size: small;"> </span>

scholarly journals Studi Analisis Manajemen Risiko Pembiayaan Mudharabah di BMT Sidogiri Cabang Bondowoso

2018 ◽  
Vol 7 (2) ◽  
pp. 95-128
Author(s):  
Ubaidillah Mansur
Keyword(s):  
Economic Theory ◽  
Risk Management ◽  
Financial Institutions ◽  
Management Strategy ◽  
Descriptive Analysis ◽  
Risk Management Strategy ◽  
Observation Methods ◽  
Interview Methods ◽  
Islamic Financial Institutions ◽  
Qualitative Descriptive

Abstract: In familiar Islamic financial institutions we hear the term mudharabah, mudharabah is a contract that involves between two or more people, namely the owner of investor capital (Shahibul Maal) who entrusts his capital to people (mudharib) to be managed. The division of mudaraba is divided into two, namely: the first: Mudharabah muqayyadah which means shahibul maal gives a limit to the funds invested. And secondly: Mudharabah Muthlaqah Shahibul Maal does not provide limits on the funds invested. The focus of this study is first how the implementation of mudharabah financing at BMT Sidogiri Branch Bondowoso. Second, what is the risk management strategy of mudharabah financing at BMT Sidogiri Branch Bondowoso. The research objectives are 1). To obtain information about the implementation of mudharabah financing at BMT Sidogiri Branch Bondowoso. 2). Want to describe the risk management strategy for mudharabah financing at BMT Sidogiri Branch Bondowoso. In this study the authors used qualitative research with interview methods, observation methods and documentation methods. so in the form of analysis we use qualitative descriptive analysis. The results showed that mudharabah financing at BMT Sidogiri Branch Bondowoso was in accordance with the Shari'a contained in sharia economic theory because in it the terms and conditions were met, but in mudharabah financing at BMT Sidogiri, Bondowoso Branch could only be realized in the form of fund collection .  

scholarly journals THE NATURE OF RISK IN ISLAMIC FINANCIAL INSTITUTIONS

2017 ◽  
Vol 2 (1) ◽  
Author(s):  
Putri Reno Kemala Sari
Keyword(s):  
Risk Management ◽  
Financial Institutions ◽  
Financial Distress ◽  
Primary Sources ◽  
Financial Industry ◽  
Financial Organization ◽  
Islamic Financial Institutions ◽  
New Interpretation ◽  
Recommendation Strategy ◽  
New Evidence

Islamic financial institutions are a risky business and several risk factors have been identified as critical to ensure that the Islamic financial institutions position remain intact amid the intense competition in the industry. The survival and success of a financial organization depends critically on the efficiency of managing risks. More importantly, good risk management is highly relevant in providing better return to the stakeholders. In addition, prudent risk management by financial institutions is the hallmark to avoid financial distress that could lead to financial crisis. This research aims to identify the types of risk in Islamic Financial Institutions. This research is using qualitative method to collect and analyze the data through direct observation and documentation study. The findings in this study offers a new interpretation of the primary sources that significantly introduce substantial new evidence and findings that would be beneficial for players in the Islamic industry, including policymakers and regulators to develop, enhance and improve the Risk Management. Furthermore, the study hopes to contribute in terms of recommendation strategy to strengthen and knowing the risk of the Islamic Financial Institutions so as to increase the overall competitiveness in the Islamic Financial Industry.

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