Islamic Banking Products and Shariah Compliance Training Course

Course overview

Islamic banks and windows must develop commercially viable products without replicating conventional lending in form or substance. Product, operations, risk, finance and compliance teams need to identify where a proposed transaction creates Shariah, conduct, documentation or accounting exposure before it reaches customers. This course addresses the practical challenge of structuring, reviewing and administering Murabaha, Ijarah, Mudarabah, Musharakah, Salam, Istisna'a, Qard and Wakalah-based products while maintaining a clear audit trail for Shariah governance and internal control.

Participants examine the contractual mechanics, cash flows, ownership transfers, agency appointments, pricing methods and risk allocation of retail, corporate and treasury Islamic banking products. They learn to distinguish permissible trade- and asset-based structures from interest-bearing arrangements, identify common Shariah non-compliance events, map product controls across the end-to-end lifecycle, and apply AAOIFI Shari'ah Standards, relevant AAOIFI accounting requirements, IFSB guidance and IFRS 9 considerations. The programme also covers Sukuk structures, takaful interfaces, profit distribution, purification of non-compliant income, and Shariah board reporting.

Delivery combines instructor-led product walkthroughs with transaction documents, process maps, numerical cash-flow exercises and case reviews drawn from Islamic retail and corporate banking. Participants work in groups to test a product proposal against a Shariah compliance checklist, identify control gaps and recommend remediation. Each participant leaves with a completed Islamic product review pack containing a transaction-flow diagram, Shariah issue log, control matrix and implementation actions that can be adapted for their institution.

The course is designed for practitioners who already understand banking products or financial-services operations and now need a working command of Islamic product structures and Shariah compliance controls. It is particularly valuable where institutions are launching Islamic offerings, operating an Islamic window, strengthening Shariah governance, or reviewing existing products for consistency with approved standards.

Course objectives

By the end of this course, participants will be able to:

• Structure Murabaha, Ijarah, Mudarabah, Musharakah, Salam and Istisna'a transactions using documented asset, ownership and agency flows
• Apply AAOIFI Shari'ah Standards to assess product terms, transaction documents and operational practices
• Distinguish Shariah-compliant profit mechanisms from riba, gharar, maysir and prohibited contractual combinations
• Map end-to-end product controls from customer onboarding through execution, monitoring, settlement and exception handling
• Prepare a Shariah compliance checklist for retail, corporate and treasury Islamic banking products
• Analyse Islamic product cash flows, profit calculation methods and key IFRS 9 and AAOIFI accounting implications
• Investigate Shariah non-compliance events and draft remediation, purification and escalation actions
• Produce a product review pack comprising a transaction-flow diagram, issue log and control matrix

Benefits of attending

Target competencies

Who should attend

• Islamic Banking Product Managers — who design or amend products and need to evidence Shariah-compliant structures
• Shariah Compliance Officers — who review transactions, monitor exceptions and report to Shariah supervisory bodies
• Relationship Managers and Corporate Bankers — who must explain Islamic financing structures accurately to clients
• Risk and Internal Audit Professionals — who test controls over Islamic product execution and governance
• Operations and Trade Finance Managers — who administer purchase, agency, ownership and settlement steps
• Finance and Regulatory Reporting Professionals — who assess profit recognition, impairment and disclosure implications

Requirements and prerequisites

Participants should have working knowledge of mainstream banking products, basic financial statements and the lifecycle of a credit or trade-finance transaction. Familiarity with terms such as principal, margin, collateral, impairment, cash flow and customer due diligence is assumed. Participants will benefit from having reviewed loan agreements, facility documents, product procedures or control checklists, but specialist Islamic finance experience is not required. A laptop with spreadsheet capability is useful for cash-flow exercises and document review. No Arabic language ability, legal qualification, Shariah scholar accreditation or prior exposure to AAOIFI standards is required.

Training methodology

The instructor uses annotated term sheets, agency agreements, purchase evidence, lease schedules and product-process maps to show how Shariah requirements operate in day-to-day banking execution. Participants calculate sample Murabaha and Ijarah cash flows, review transaction sequences for control failures, and compare alternative structures in small groups. Case work covers retail financing, corporate trade facilities and Sukuk issuance. Each day closes with a focused applied task, culminating in a product review workshop where participants prepare an implementation-ready Shariah compliance pack for a selected banking product.

Course outline

Day 1: Islamic banking foundations and governance

• Principles of riba, gharar, maysir and prohibited business activities
• Asset-backed, asset-based and trade-based financing distinctions
• Roles of the Shariah supervisory board, management and internal control functions
• AAOIFI Shari'ah Standards structure and practical use
• Shariah governance policy, product approval and fatwa documentation
• Islamic banking product lifecycle from concept through post-launch monitoring
• Shariah non-compliance risk taxonomy and escalation thresholds

Workshop: Participants map the governance route for a proposed Islamic retail product and produce a RACI-style approval and oversight chart.

Day 2: Trade and leasing product structures

• Murabaha purchase-orderer mechanics and cost-plus-profit disclosure
• Customer agency arrangements and controls over constructive possession
• Ijarah asset ownership, maintenance responsibilities and rental calculation
• Ijarah muntahia bittamleek transfer-of-ownership structures
• Salam contract conditions, delivery risk and parallel Salam arrangements
• Istisna'a manufacturing finance and parallel Istisna'a documentation
• Transaction document review for purchase orders, agency and sale contracts

Workshop: Participants review a Murabaha file, identify breaks in title and agency controls, and produce a corrective-action log.

Day 3: Partnership, agency and retail banking products

• Mudarabah capital, profit-sharing ratios and loss allocation
• Diminishing Musharakah for home finance and ownership-unit transfers
• Wakalah investment agency, fees and performance incentive boundaries
• Qard, Hibah and current-account treatment in Islamic banks
• Tawarruq structures, commodity execution and governance concerns
• Islamic deposit products and profit distribution management
• Retail customer disclosures, suitability and conduct-risk controls

Workshop: Working in teams, participants build a diminishing Musharakah customer journey and produce a control checklist for each ownership transfer.

Day 4: Risk, accounting and capital-market applications

• Credit, market, liquidity and operational risk in Islamic finance contracts
• Shariah non-compliance event identification, purification and financial impact
• AAOIFI Financial Accounting Standards and Islamic transaction recognition
• IFRS 9 classification, expected credit loss and modification considerations
• IFSB capital adequacy principles for Islamic financing exposures
• Sukuk Ijarah, Murabaha and Wakalah structure comparison
• Takaful and bancatakaful interfaces within Islamic banking distribution

Workshop: Participants assess a case involving non-compliant income and prepare a remediation, purification and governance-reporting recommendation.

Day 5: Product review and implementation workshop

• Islamic product proposal assessment using a structured review template
• Contractual substance versus form in product design decisions
• Control matrix design for onboarding, execution, monitoring and settlement
• Exception management, breach registers and root-cause analysis
• Shariah audit testing procedures and evidence requirements
• Management information and Shariah board reporting packs
• Product launch implementation planning and post-launch assurance

Workshop: Participants complete and present a product review pack containing a transaction-flow diagram, Shariah issue log, control matrix and 90-day action plan.

Tools & standards covered

AAOIFI Shari'ah Standards, AAOIFI Financial Accounting Standards, IFSB Capital Adequacy Standard, IFRS 9 Financial Instruments

A typical training day

Live online deliveries follow the same structure in the East Africa Time zone, with shorter screen blocks and longer breaks.

What the fee includes

How you can take this course

Certification

Participants who complete the full five days receive the Skillset Development Certificate of Completion, stating the course title, course code, dates and delivery format — suitable for professional-development records and employer reimbursement.

Frequently asked questions