Course Syllabus

The Post Graduate Diploma in Islamic Banking is equivalent to Level 7 on the National Qualifications Framework of England, Wales, and Northern Ireland in the United Kingdom.

The course consists of nine modules with 38 lessons covering important aspects of Islamic banking interest-free products, services and operations. There are assignments at the end of each lesson. The assignment for some lessons is a quiz with Multiple Choice Questions (MCQs) that are designed to also test your in-depth understanding of the core concepts and their practical applications explored within the lessons.

This module explains Islamic economic principles based on Divine Guidance from the Islamic perspective, emphasising the prohibition of interest (Riba), speculation (Gharar), and gambling (Maysir) in commercial transactions. It stresses moral stewardship, noting that resources belong to God and should be shared ethically to benefit all stakeholders.

Lesson 1. The Conventional Economy and Banking System

Lesson 2. Divine Guidance for a Moral Economy: The Islamic Perspective

Lesson 3. Introduction to Islamic Economics

Lesson 4. Shari’ah and Maqasid al Shari’ah: Applications in Financial Transactions in Banking Environments.

Lesson 5. Evolution of Islamic Banks and Interest-Free Banking

This module explains the essential elements of valid Islamic contracts, detailing various types and their applications by Islamic banks. It also covers Accessory Contracts that support non-interest finance services and Non-commercial Contracts serving unique purposes in Islamic banking and society.

Lesson 1. Islamic Commercial Contracts and Concept of Promise

Lesson 2. Qard and Dayn: Contracts for Loan and Sale of Debt

Lesson 3. Murabaha and Musawamah: Contracts for Cash and Credit Transactions Working Capital and Liquidity Management

Lesson 4. Mudarabah and Musharakah and Diminishing Musharakah: Contracts for Profit and Risk Sharing Partnerships and Reducing Partnership transferring to Full Ownership

Lesson 5. Salam with Parallel Salam, Istisna’a with Parallel Istisna’a: Contracts for Forward Trading and Futures Market

Lesson 6. Ijarah and Ijarah wa Iqtina: Contract for Operating Lease and Contract for Lease and Ownership

Lesson 7. Accessory Contracts that support non-interest finance services and Non-commercial Contracts that serve distinct purposes in Islamic banking and society.

This module addresses the importance of deposit mobilisation for Islamic banks’ profitability and operations. Deposits fund loans, finance investments, and provide necessary liquidity. Islamic banks, prohibited from paying interest (riba) offer returns on deposit’s through profit-sharing structures.

Lesson 1. Mobilising Deposits, Types of Deposit Accounts, the underlying Contracts, Shari’ah Compliance and the Return Structure

Lesson 2. Deposit Management, Profit Calculation and Distribution

Lesson 3. Takaful for Deposit Protection (Islamic Deposit Insurance)

This module covers Islamic loans and finance that are important economic growth and highlights responsible finance for SMEs and low-income groups. It. Unlike conventional banks that charge interest, Islamic banks use profit-sharing structures to recover the cost of their investment and support financial inclusion and social welfare.

Lesson 1. Loans and Finance, Shari’ah Compliance and Recovery of Finance Cost

Lesson 2. Personal Loans, Overdraft, Personal Asset Finance, and House Finance (Islamic Mortgages) and Qard Hasan

Lesson 3. Business Loans and Finance for Asset Purchase, Working Capital and Entrepreneurial Joint Ventures

Lesson 4. Finance for Trade: Exports and Imports

Lesson 5. Finance for Projects and Real Estate

Lesson 6. Finance for Small and Medium-sized Enterprises (SMEs), and Microfinance

This module explains the fee-based services that provide a steady and diversified fee and commission income for Islamic banks, reducing reliance on profit-sharing and mark-up-based products. Services include Payment and Settlement Services, Agency Services, Investment Services, Safekeeping and Custody, Advisory and Investment Services.

Lesson 1. Payment and Settlement Services: Processing cheques and other payment instruments, facilitating electronic payments and money transfers, issuing and managing payment cards for consumers and businesses

Lesson 2. Agency, Safekeeping and Custody Services: Handling letters of Credit, Collection of Bills, Providing secure storage for valuables and Safekeeping of securities and other financial assets

Lesson 3. Advisory Services and Wealth Management: Offering financial, investment, and business advisory services to help customers make informed decisions and investment advisory and portfolio management services to customers

This module explains the capital market’s role, a key part of the financial system, including products like stocks, bonds, debentures, long-term loans, and financial derivatives. These can pose higher risks but offer higher returns. The Shari’ah screening process ensures compliance with Islamic law. Foreign Exchange Transactions provide currency exchange services and facilitate international trade and investment.

Lesson 1. The Capital Markets: Financial Products, Investments and Liquidity Management

Lesson 2. Foreign Exchange (Forex) Operations: Various activities involving the exchange of currencies for individuals and businesses and forex trading facilitating international trade and commerce

Lesson 3. Financial Derivatives: Various purposes: Risk management, hedging, arbitrage between markets, and speculation

Lesson 4. Sukuk, an alternative to interest-bearing bonds: Purpose, Structuring, Securitisation, Pricing, and Risk Management

Lesson 5. Shari’ah Screening for Permissible Investments: Shari’ah Compliance

This module explains the basic principles and functions of Fintech and how FinTech can enable Islamic banks to provide easy accessibility to financial services, payment systems, and banking dedicated to unbanked or hard-to-reach populations at more affordable costs. Blockchain technology is also explained and the role it can play to amplify the impact of Islamic banking and finance on sustainable development.

Lesson 1. Fintech: Definition and scope, historical development and evolution of Fintech and key technologies in Fintech: Transforming both conventional and Islamic banking services.

Lesson 2. Blockchain: Blockchain technology, cryptocurrencies, and digital currencies for Islamic Financial Services and Permissibility under Shari’ah.

This module covers Regulation, Supervision, and Corporate Governance, including Shari’ah Supervision, essential for Islamic banking stability. Central banks regulate licensing, operations, and risk management. Shari’ah Supervisory Boards ensure compliance and ethical conduct. Financial accounting must meet international standards and Shari’ah compliance, with external audits verifying accuracy.

Lesson 1. Regulation and Supervision by Central Banks and role of Central Banks in regulating Islamic banks

Lesson 2. Corporate Governance, Moral Values and Ethics, Corporate Social Responsibility, Maqasid Al Shari’ah, Leadership, Education and Training

Lesson 3. Liquidity and Risk Management: Role and Importance and Shari’ah Compliance

Lesson 4. Shari’ah Governance Framework: Appointment of Independent Shari’ah Supervisory Board, Role and responsibilities, Advisory, Approvals in product development and operational processes, Monitoring Shari’ah Compliance and Certification.

Lesson 5. Product Development: Structuring Islamic banking products integrating Shari’ah Compliance, from concept to market release

Lesson 6. Financial Accounting and Reporting and External Audit and Shari’ah Audit

This module introduces takaful, an Islamic alternative to conventional insurance, helping banks manage operational risks adhering to Shariah. It provides security for loans and finance. Islamic banks can also offer takaful products to their customers increasing profitability through commissions and enhancing customer relationships. 

Lesson 1: Takaful for Assets Pledged as Security for Loans and Finance, Selling Takaful Plans and Enhancing Customer Loyalty