International Finance
Islamic Banking

Boom Times for Islamic Education

The object of the Islamic economic system is to secure the widest and most beneficial distribution of wealth through institutions, set-up by it and through moral exhortation. Muslims worldwide abide strictly by the teachings of their founder Muhammad, who led his life as a humble merchant and was a “trustworthy one” by all those who knew him. His business principles are strongly linked to humanitarian...

The object of the Islamic economic system is to secure the widest and most beneficial distribution of wealth through institutions, set-up by it and through moral exhortation.

Muslims worldwide abide strictly by the teachings of their founder Muhammad, who led his life as a humble merchant and was a “trustworthy one” by all those who knew him. His business principles are strongly linked to humanitarian values where the poor, sick and the needy took precedence. He acknowledged the sufferings of the people and continually strived to create solutions for them which would ensure their care even after his death. Islamic finance strikes a chord between business principles and how Muslims are encouraged to create wealth.  The Holy Quran states “The object of the Islamic economic system is to secure the widest and most beneficial distribution of wealth through institutions, setup by it and through moral exhortation “. The holy Quran states wealth must remain in constant circulation among all sections of the community and should not become the monopoly of the right. One of the most sensible things that emerged from the financial crisis in Europe is a realistic approach to estimate the growth of Islamic Finance. The financial crisis has led people to reassess the role of moral values in finance. One such example is France, which is working relentlessly to make the legal and organizational reformations to facilitate the offering of financial products and services. With global finance still recovering, one area of banking still among the top choices among the B-Schools worldwide is Islamic finance. As Islamic finance grows into a lucrative sector, B-Schools throughout the world are adding courses and specialized degrees to train students in structuring investments that comply with Quranic laws. The vast wealth of Muslims worldwide and buoyed by high oil prices and a Muslim world interested in saving money according to the religion’s principles have driven a boom for the development of these studies. John board, director of ICMA Board of financial studies center at the Henley Business School in Britain retorts “There is a shortage of expertise”. B-Schools opine the boom is so great that they are having trouble finding faculty with the required expertise in financial practice and the principles of Shariah laws.

Bank Negara Malaysia, the Central Bank of Malaysia, started the Islamic Finance INCEIF in 2006 to train practitioners. Cass B-School is among the many British Institutions with the new programs in the area. The Exec- MBA, it offers in Dubai gives the students to specialize in Islamic Finance. London School of business and Finance offers a program in M.Sc (Islamic finance and banking). The course covers the differences between Islamic and traditional banks as well as show how bank accounts work under Sharia Laws. The syllabus also covers key activities of Islamic banks and trends in Islamic portfolio management. Some of the subjects covered under this course are:

  1. Fundamentals of Islamic Finance
  2. Islamic Banking Operations
  3. Islamic Portfolio Management

Islamic Finance courses offered in B-Schools seek to analyse the principles and trends in Islamic Banking.  Major financial institutions which have a base in non-Islamic countries are opening up Islamic finance departments, which have great potential for generating revenues for banks. Experts also believe that the importance of specializing in Islamic finance on MBA programs will increase greatly in the coming years. The big four auditing firms KPMG, PwC, E&Y and Deloitte have established their own Islamic finance divisions, and there is a long list of international finance bigwigs  such as HSBC, Deutsche Bank, UBS which are stepping their feet into the wholesale trade and investment in the Shariah compliant market.  Dr.Omneya Abdeselam, senior lecturer and director of the El Shaarani Islamic Business and Finance (EIBF) Research Centre at Aston Business School in the U.K. says “Given the growth of Islamic finance it is important for MBA students to study this subject to get a well rounded exposure to the current trends in finance. This has become very important considering the crisis in International Financial Market”. In one of the recent developments happening in the Islamic Finance industry a research partnership has been formed to create case studies for business school programs, which spells out the commercial implications of Islamic finance. Deloitte’s Islamic Finance Knowledge Centre (IFKC) in partnership with INCEIF, the global university for Islamic finance in Malaysia, and the University of Reading’s Henley Business School in England, have undertaken a research initiative that will focus on four key areas: regulation and governance, risk management and internal controls, product strategies and marketing and talent leadership programs. The goal of this program is operational excellence and viable business models for Sharia compliant businesses.

With big banks and accounting firms catering to seek Sharia compliant products and services, a number of business schools are incorporating Islamic finance into their programs. These case studies and research centre will help the industry and experts to analyze pricing strategies in Islamic finance compared to conventional banking, matching prices offered by conventional banks within a sharia complaint framework.

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