scholarly journals MANAJEMEN RISIKO PADA BANK SYARIAH

2019 ◽  
Author(s):  
Afriyeni Afriyeni ◽  
Romi Susanto
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Liquidity Risk ◽  
Deep Understanding ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Legal Risk ◽  
The World ◽  
Banking Business ◽  
Conventional Banks

Research and experience over the last two decades has resulted in a deep understanding of issues relating to risk management and the principles of a well established risk faced by management. The company managers are increasingly recognizing the importance of risk management. In the context of risk management, the guidelines were implemented over the years, made only for conventional banks. Whereas players in the world and national banking business not only conventional banks, but has also been enlivened by banks with Islamic principles that number continues to increase from year to year. This paper gives an overview of how risk management in Islamic banking. In general, the risks faced by Islamic banking can be classified into two major parts. Ie the same risks faced by conventional banks and the risk that is unique because it must follow the principles of sharia. Credit risk, market risk, benchmark risk, operational risk, liquidity risk, and legal risk, Islamic banks must be faced. But, because they have to abide by the rules of Sharia, the risks faced by Islamic banks had to be different.

Financial Risk of Conventional and Islamic Banks: Does Institutional Quality Matter?

2021 ◽  
Vol 12 (3) ◽  
pp. 510-524
Author(s):  
Normaizatul Akma Saidi Et.al
Keyword(s):  
Credit Risk ◽  
Financial Risk ◽  
Liquidity Risk ◽  
Islamic Banks ◽  
Government Effectiveness ◽  
Regulatory Quality ◽  
Level Data ◽  
Conventional Banks ◽  
The Relationship ◽  
Conventional And Islamic Banks

Banks play a significant role in financing the economy and take on risky financial activities based on information and trust as they specialized companies with their own specificities. This study was propelled to unravel the determinants that affect financial risk (liquidity risk and credit risk) for conventional and Islamic banks. The bank-level data of conventional and Islamic banks in the regions of Middle East, Southeast Asia, and South Asia between 2006 and 2014 were collected from the Bankscope, which is a commercial database produced by the Bureau van Dijk. Thus, for conventional banks the obtained results exhibited significantly positive relationship between regulatory quality towards liquidity risk. Then, the relationship between regulatory quality towards credit risk was negatively significant for conventional banks. Meanwhile, as for Islamic banks, the relationship between government effectiveness and regulatory quality towards financial risk was insignificant. Hence, the regulators or policymakers are able to identify specific mechanism to improve the risk management of these banks as well through this study.

Risk and risk management practices

2020 ◽  
Vol 11 (8) ◽  
pp. 1555-1581 ◽  
Author(s):  
Adel Elgharbawy
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Management Practices ◽  
Archival Data ◽  
Islamic Banks ◽  
Monitoring And Control ◽  
Content Type ◽  
Different Types ◽  
Conventional Banks ◽  
And Control

Purpose This study aims to compare types and levels of risk and risk management practices (RMPs) including the recognition, identification, assessment, analysis, monitoring and control of risk in both Islamic and conventional banks. Design/methodology/approach A questionnaire survey was conducted among the Islamic and conventional banks in Qatar, together with an analysis of archival data extracted from the Thomson Reuters Eikon database for the period 2009-2018. Data were analysed using descriptive statistics, ANOVA and regression analysis. Findings Islamic banks encounter unique types and levels of risk that are not encountered by conventional banks. In Islamic banks, risks such as those of operation and Sharia non-compliance are perceived to be higher, while in conventional banks other risks such as those of credit and insolvency are higher; other risks, for example, liquidity risk, are faced by both. RMPs are determined by understanding risk and risk management, risk identification, risk monitoring and control and credit risk analysis, but not by risk assessment and analysis. However, the RMPs of the two types of bank are not significantly different, except in the analysis of credit risk. Research limitations/implications The study contributes to the debate in the literature by developing a better understanding of the dynamism of risk management in Qatari banks, which can be extended to similar contexts in the region. However, the relatively small sample size in only one country limits the possibility of generalizing the findings. The survey methodology is based on the perception of bankers rather than their actual actions and does not provide in-depth analysis for each type of risk, especially credit risk. However, using archival data, in addition to those from the survey, minimises the bias that would result from depending on one source of data. Practical implications The study provides valuable insights into the different types and levels of risk, as well as the RMPs in Islamic and conventional banks, which can help in guiding the future development and regulation of risk management in the banking sector of Qatar and its region. Originality/value The study helps to explain the mixed results of previous studies that compare types and levels of risk and RMPs in Islamic and conventional banks. Using different types of data and analysis, it provides evidence from one of the fastest growing economies in the world. It also addresses the concerns over RMPs in banks since the global financial crisis.

scholarly journals How Efficient is the Islamic Banking Model in Pakistan?

2017 ◽  
Vol 6 (1) ◽  
pp. 111-125
Author(s):  
Tahseen Mohsan Khan ◽  
Mohsan Khan Rizwan ◽  
Saima Akhtar ◽  
Syed Waqar Azeem Naqvi
Keyword(s):  
Credit Risk ◽  
Asset Management ◽  
Capital Adequacy ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Return On Assets ◽  
Management Capability ◽  
Conventional Banks ◽  
Conventional And Islamic Banks

The purpose of this study is to analyze the conventional and Islamic banking in Pakistan. For this study, a sample of 19 conventional banks and five Islamic banks was selected. The CAMEL approach is used to evaluate the performance of both conventional and Islamic banks. Ten ratios were used to measure profitability, liquidity and credit risk. Our findings suggest that Islamic banks are less efficient than conventional banks in asset management, management capability and liquidity. Conventional banks have better earning capability in terms of return on assets and overhead ratios. The analysis also shows that Islamic banks have better capital adequacy than conventional banks.

scholarly journals Impact of Credit Risk Transfer Techniques on Lending Behavior of Conventional & Islamic Banks in Pakistan

2017 ◽  
Vol 4 (2) ◽  
pp. 12 ◽  
Author(s):  
Yusra Saeed ◽  
Huma Ayub
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Random Effect ◽  
Random Effect Model ◽  
Policy Implications ◽  
Islamic Banks ◽  
Risk Transfer ◽  
Management Techniques ◽  
Conventional Banks ◽  
The Impact

Application of risk management techniques gain significant importance after the financial crises of 2008. Banks adopt contemporary risk management techniques to eliminate credit risk associated with the enlargement of their lending volume. The present study aims to analyze the impact of credit derivatives on lending/financing behavior of conventional and Islamic banks of Pakistan. The study used comparative analysis by employing random effect model for the sample of 20 conventional banks and pooled OLS regression on sample size of 5 Islamic banks for the period of 2006-2016. Results of the study show that conventional banks effectively increase their lending volumes by utilizing risk transfer techniques. However, Islamic banks are still at its infancy in utilizing risk transfer techniques due to shariah restrictions. The study recommends policy implications for Islamic bank to introduce innovative shariah compliant hedging instruments to boost their financing portfolios.

scholarly journals PERAN TATA KELOLA PERBANKAN SYARIAH TERHADAP RISIKO PERBANKAN SYARIAH DI INDONESIA

2020 ◽  
Vol 8 (1) ◽  
pp. 45
Author(s):  
Rudy Hartanto
Keyword(s):  
Corporate Governance ◽  
Credit Risk ◽  
Good Governance ◽  
Banking System ◽  
Islamic Banking ◽  
Investment Risk ◽  
Islamic Banks ◽  
Control Variables ◽  
Banking Market ◽  
Banking Business

The increased penetration of the Islamic banking market in Indonesia is one of the highest in ASIA. The enhancement in the market has an impact on increasing the risk complexity of Islamic banking business activities. Sharia banking risks need to be managed and controlled properly in order to prevent banking failures. Bank governance (corporate governance) is indicated as one of the things that plays an important role in determining the level of risk faced by banks. The purpose of this study is to examine whether good governance can reduce the risk of Islamic banking. This study uses the population of Islamic banking from 2014-2018. The samples obtained in this study are 58 Islamic banks. The results showed that good governance can reduce the banking risk. In addition, the testing using control variables showed that the greater the size of the banking system that is proxied by the total assets, the higher the risk received by banks both from credit risk to investment risk.

scholarly journals Islamic Versus Conventional Banks in Lebanon: An Empirical Study of Credit Risk Management

2018 ◽  
Vol 10 (8) ◽  
pp. 53
Author(s):  
Boutheina Hachem ◽  
Hiyam Sujud
Keyword(s):  
Risk Management ◽  
Empirical Study ◽  
Credit Risk ◽  
Risk Mitigation ◽  
Islamic Banks ◽  
Credit Risk Management ◽  
Credit Management ◽  
Management Processes ◽  
Conventional Banks ◽  
Conventional And Islamic Banks

The aim of this research is to compare conventional and Islamic banks in various aspects of credit risk management processes. The study used 200 questionnaires, collected from 21 traditional banks and 4 Islamic banks in Lebanon. The results found that differences in the various issues of credit management between Islamic and conventional banks. Islamic banks are more understanding, aware, and cautious in their approach than traditional banks. Islamic banks are more efficient in assessing and analyzing credit risk than conventional banks. Lastly, Islamic banks are more used to credit risk mitigation than traditional banks.

scholarly journals Liquidity Risk Management: A Comparative Study between Conventional and Islamic Banks in Bangladesh

2016 ◽  
Vol 10 (2) ◽  
pp. 18-35 ◽  
Author(s):  
Md Lutfor Rahman ◽  
SM Hasanul Banna
Keyword(s):  
Risk Management ◽  
Liquidity Risk ◽  
Equity Capital ◽  
Capital Adequacy ◽  
Annual Reports ◽  
Islamic Banks ◽  
Working Capital ◽  
Return On Assets ◽  
Conventional Banks ◽  
Conventional And Islamic Banks

Liquidity risk may arise from diverse operations of financial intermediaries, facilitators and supporters as they are fully liable to make available liquidity when required by the third party. Incase of Islamic Banks additional efforts are required for scaling liquidity management due to their unique characteristics and conformity with Shariah principles. The objective of this study is to look into the liquidity risk associated with the solvency of the financial institutions, with a purpose to evaluate liquidity risk management (LRM) through a comparative analysis between conventional and Islamic banks of Bangladesh. This paper investigates the significance of Size of the Firm, Net Working Capital, Return on Equity, Capital Adequacy and Return on Assets (ROA), on Liquidity Risk Management in conventional and Islamic banks in Bangladesh. The study has taken six mid-size banks- three conventional and three Islamic banks as samples. It is based on secondary data which are collected from the selected banks’ annual reports, covering a period of 2007-2011. Independent variables that have positive but insignificant relation are; size of the bank and net working capital to liquidity risk in Islamic banks and in case of conventional banks size of bank is negatively related with the liquidity risk. Only return on assets is positively affecting the liquidity risk at 10% level in case of conventional banks, but in Islamic banks the relationship is insignificant. The other variables are found to be insignificant in affecting the liquidity risk for both the conventional and Islamic banks in BangladeshJournal of Business and Technology (Dhaka) Vol.10(2) 2015; 18-35

Islamic bank vs conventional bank: intermediation, fee based service activity and efficiency

2016 ◽  
Vol 9 (2) ◽  
pp. 296-311 ◽  
Author(s):  
Dimas Satria Hardianto ◽  
Permata Wulandari
Keyword(s):  
Credit Risk ◽  
Stochastic Frontier ◽  
Control Variable ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Control Variables ◽  
Content Type ◽  
Operating Income ◽  
Service Activity ◽  
Conventional Banks

Purpose The aim of this research is to compare the differences of intermediation, fee-based service activity and efficiency of conventional banks vs Islamic banks in Indonesia for the 2011-2013 period. Moreover, this study also includes some control variables to find their effect on the dependent variables. Design/methodology/approach This research uses two methods, namely, stochastic frontier approach and panel data regression. Findings The result indicates that Islamic banks have a higher intermediation ratio, have higher proportion on fee income-to-total operating income and are less efficient. The control variable that has a positively significant effect on intermediation ratio is size; meanwhile, inefficiency and non–loan-earning asset are negatively affecting the intermediation ratio. The control variable that show a positively significant effect on the proportion of fee income-to-total operating income is size; meanwhile, the credit risk variable has no significant effect on the proportion of fee income-to-total operating income. Size and credit risk are the control variables that have a negative relation to efficiency. Originality/value This study has significantly contributed to Indonesian Islamic banking based on which the Islamic banking manager should recognize that the intermediation level, fee-based service activity and efficiency are crucially important in establishing competition and maintaining sustainable Islamic banking.

scholarly journals Risks Faced by Islamic Banks: A Study on the Compliance Between Theory and Practice

2019 ◽  
Vol 10 (2) ◽  
pp. 137
Author(s):  
Salma Rhanoui ◽  
Khalid Belkhoutout
Keyword(s):  
Risk Management ◽  
Financial System ◽  
Qualitative Approach ◽  
Theory And Practice ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Conventional Banks ◽  
Methods Of Operation ◽  
Global Financial System

Risk management is an active field where applications are reconsidered after each obstacle. Islamic banks are not excluded from this rule, particularly when they operate in a global financial system, in which they are occasionally forced to follow conventional banking rules. Nevertheless, Islamic banks are part of a less-advanced industry and face many challenges when handling risk. In theory, Islamic banks are confronted with two categories of risk: common risks, which are similar to the risks faced by conventional banks and risks specific to Islamic banks, due to their specificities and methods of operation. However, practice does not necessarily reflect this dichotomy. Therefore, the purpose of this paper is to make a compliance study between the theory and practice of Islamic banking risks. More precisely, it will compare all the risks fully recognized by the theory to the risks that are actually managed by the Islamic banks in their activities, using a sample of these institutions. The results of this qualitative approach, demonstrate that practice can be quite different from theory.

scholarly journals Risk Management of Islamic Banking: An Islamic Perspective

2017 ◽  
Vol 1 (1) ◽  
pp. 25-28
Author(s):  
K. M. Anwarul Islam ◽  
Orobah Ali Barghouthi
Keyword(s):  
Risk Management ◽  
Financial Services ◽  
Insurance Companies ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Vast Number ◽  
Investment Companies ◽  
Operational Problem ◽  
Mutual Insurance ◽  
Conventional Banks

The financial services industry of Islam consists of an increasingly vast number of institutions, such as investment and commercial banks, investment companies and mutual insurance companies. In Islamic banks effective risk management deserves special attention. However, it has numerous drawbacks that are required to be understood better. Risk management is about the attitude towards paying off and the strategies in dealing with them and the risks associated with it in relation to modern banking. As an operational problem, risk management is about the classification and identification of methods, processes and risks in banks to supervise, monitor and measure them.In comparison to conventional banks, Islamic banks face big difficulties in identifying and managing risks due to bigger complexities emerging from the profit loss sharing concept and nature of particular risks of Islamic financing. This research investigates in detail the need for risk management in Islamic bank (Ilias, S. E. B. 2012).

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