Abstract
Islamic banking is interest-free banking which makes it necessary for Islamic banks to
take active part in the operations of the business, i.e. share profits as well as losses.
Banks including Islamic banks prefer to take minimum risk. On the surface, it may seem
that Islamic banks face more risk and hence, will have more volatile or even negative
returns on their assets.
This paper analyzes the risk management procedures of Islamic banks by giving a
differential analysis of risk management discussing only the unique characteristics of
risk management in Islamic Banking. The usual credit assessment procedures and
BASEL are not discussed. This paper looks at the comparative performance of
Islamic banks and conventional banks by using ROE as the benchmark.
Salman Ahmed Shaikh, Dr. Amanat Ali Jalbani . (2009) Risk Management in Islamic and Conventional Banks: A Differential Analysis, Journal of Independent Studies and Research-Management, Social Sciences and Economics, Volume-07, Issue-2.
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