College of Business and Economics
Department of Finance and Economics
Proposed Minor In Islamic Banking and Finance
November, 2010
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The Request:
The Department of Finance and Economics proposes to launch a minor in
Islamic Banking and Finance for all undergraduate students in the college of
business.
Purpose and the Need:
The growth of Islamic banking and Finance has been remarkable around the
global financial systems. The total assets in this segment has jumped from
US$1.9 billion in 2000 to US$10.3 billion by July 2006, an increase of over
400% . The total assets for the Islamic banking industry currently stand at
US$15.9 billion (CBB, June 2008) (http://www.bahrain.com/bahrainislamic-banking). According to Qatar financial centre the rapid development
of the Islamic finance and Islamic banking industry includes not only in the
Middle East but across the globe. Furthermore, Islamic financial products
and instruments such as Islamic swap and Islamic bonds have also increased.
This development resulted in a 15% -20% annual growth in demand for
Islamic
financial
services.
(http://www.qfc.com.qa/en-US/Aboutqfc/Business_case/Islamic_finance.aspx).
In the Qatari financial industry, there are currently four Islamic commercial
banks (Qatar Islamic bank, Qatar International Islamic bank, Al-Rayyan
Bank, Barwa Bank). These are dominating about 25% of the total banking
services. Adding to this, five traditional commercial banks in Qatar engaged
in Islamic finance by opening branches compliant with Islamic sharea
principle. Moreover, both the government and some major institutions such
as Qatari Diar have engaged in Islamic finance markets by issuing Islamic
financial instrument such as Sukuk to raise finance. This indicate how much
the Qatari market is in need for talented graduates with knowledge in
Islamic finance.
A survey conducted among junior and senior CBE students. The sample size
was 281 students with 31 male and 250 female. The survey indicates that
65.83% of students are likely to take the minor in Islamic banking and
finance if it is offered. Also, it shows that 48% of students are ready to
enroll as soon as the program is effective and about 29% are willing to enroll
in the fall of 2011. About 76% of the students agree (55.5% ) and strongly
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(20.62%) believe that there are other people in the college would be
interested in this minor. For more details please see the attached Survey and
the results analysis for the survey.
Creating Minor in Islamic Finance will really respond to the growing interest
in Islamic finance and banking , and also the increase in Islamic Banking
services, Islamic Investment and other financial services that are based on
Islamic principles. This minor would also contribute to encourage and
support Islamic finance and banking due to their vital role in the country’s
economy growth and participate in the Qatar’s National vision 2030 in
building a diversified and vibrant economy in Qatar. We strongly believe
that there is a need for Islamic finance and banking in Qatar. This minor will
contribute to creating an environment contributing to the development of
Islamic banking and finance in Qatar and support other Islamic financial
institutions by providing them with a qualified graduates in this field not
only in Qatar but also in all GCC countries and others.
Alignment with our Mission and Strategic Plan
Our initiative to offer a minor in Islamic finance and banking reflects our
desire to inspire and provide more students with all the knowledge and the
skills needed in their career. This is aligned with the college mission to
provide high quality applied business education that connects theory to
practice, serve the Qatari community and contribute to Qatar’s prosperity.
Our college endeavor to provide high quality of applied education to all
students. During the last few years our college successfully graduated
effective financial managers and decision makers who proved their
competitiveness in market force. Key policy makers in Qatar are pointing to
the need to put more emphasis in our education. Also, it is the university
mission to provide the market force with skilled graduated students in the
new and demanded field. Therefore, innovating new programs such as the
minor in Islamic banking and finance will fulfill the market demand for
qualified and specialized graduates in Islamic finance field.
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The Curriculum Structure
Students will have to take 15 credit hours (5 courses) classified in two
categories:
1) Required Courses (12 Credit Hours)
Sub
FINA
No
404
ECON
455
FINA
403
FINA
407
Title
Credit Hours
Islamic Banking and
3
Finance
(already
offered)
Islamic Economics
3
Insurance and Risk
Management
(already offered)
Islamic Modes of
Financing
Pre-requisites
FINA 201 + STAT 220
Offered
Spring
Fall
3
ECON 111 & ECON
112
FINA 201 + STAT 222
3
FINA 201 + STAT 220
Spring
Fall
2) Elective Course (3 Credit Hours)
Sub
FINA
No
401
FINA
402
FINA
405
FINA
406
Title
Portfolio Management
Credit Hours
3
(already offered)
Personal Finance (already
offered)
Financial Derivatives
(already offered)
Management of Financial
Intermediaries (already
offered)
Pre-requisites
FINA 302
Offered
Fall
3
FINA 201
Spring
3
FINA 302
Fall
3
FINA 303
Spring
Course Descriptions
Five courses will be required for this Minor (four required courses and one
elective course). The courses descriptions for the required courses as follow:
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FINA 401 Islamic Banking and Finance
Credit: (3 hours)
Prerequisite: FINA 201 & STAT 220
This course offered by our department. It focuses on the principles of
Islamic finance, foundations of Islamic securitization, Islamic funds and
their potentials, how the Islamic banks operate in comparison with
conventional banks, and analyzing the Islamic product and their
applications. Topics covered include riba, Profit / loss sharing method of
finance is compared with fixed interest charges, and financial instruments.
ECON 455 Islamic Economics
Credit: (3 hours)
Prerequisite: ECON 111 & ECON 112
The course offers an overview of Islamic economic and financial system.
Topics coved include the history of Islamic finance and Banking, market
perceptions & performance of Islamic finance industry, comparison of
capitalism & Socialism, Philosophy of Islamic Economical system, Islamic
model for distribution of wealth, conventional and Islamic economical
systems, Ijtihad, Commercial Interest, Usury, Simple and Compound
Interests, Markup, Profit, Islamic Commercial & Investment Banking.
FINA 403 Insurance and Risk Management:
Credit: (3 hours)
Prerequisite: FINA 201 + STAT 222
This course addresses and examines the basic risk theory and elementary risk
management principles and techniques. Topics include life Insurance and
annuity products, property/liability insurance, life/health insurance and
selected social insurance programs; insurers and their operations; guidelines
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for efficient purchase and use of insurance products. Special attention is given
to Islamic Insurance or Takaful, Islamic Law for Islamic Insurance.
FINA 407 Islamic Modes of Financing
Credit: (3 hours)
Prerequisite: FINA 201 + STAT 222
The course focuses on Islamic Modes of Financing. Topics coved include
Mudarabah – a Equity Based Product & explains its basic rules, conditions
of sale, steps of Mudarabah Financing, its contractual mechanism,
Musharakah – a Equity Based Product, issues related to Musharkah, its
model agreement, Diminishing Musharakah, its differences with
Musharakha, Murabaha – a Equity Based Product, Ijarah – a Semi Debt
based product, and Istisna – a Trade Based Product.
FINA 401 Portfolio Management
Credit Hours: (3 hours)
Prerequisite: FINA 302
This course covers various topics related to portfolio management. Topics
include diversification and portfolio theory, capital market theory, security
selection and bond selection; portfolio management: revision of equity
portfolio and fixed-income portfolio, risk management with derivative
securities, performance evaluation, and portfolio manager’s duties and
responsibilities; integrating derivative assets and portfolio management.
FINA 402 Personal Finance
Credit Hours: (3 hours)
Prerequisite: FINA 201
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This course provides an overview of fundamental concepts of personal
finance. Topics include types of investment securities, retirement and real
estate planning, insurance planning, budgeting, credit, home ownership, and
savings.
FINA 405 Financial Derivatives
Credit Hours: (3 hours)
Prerequisite: FINA 302
This course focuses on options and futures markets, investment and risk
management strategies using these derivative products, and pricing of
options
and futures contracts. Additional coverage includes basic swap agreements
and exotic options.
Resources
Two new courses will be offered (Islamic Economics and Islamic Modes of
Financing). We need Two new faculty members to teach these for males and
females.
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