IBSL Diploma in Islamic Banking Exam study plan

Sequence the founding milestones of modern Islamic finance (Mit Ghamr 1963, Nasser Social Bank 1971, Dubai Islamic Bank 1975, IsDB 1975, AAOIFI 1991, IFSB 2002) on a timeline and state the founding purpose of each body.

Distinguish the four primary Sharia sources (Qur'an, Sunnah, ijma, qiyas) from the secondary tools (istihsan, maslaha mursala, urf, sadd al-dhari'ah) and give one commercial-banking application of each.

Explain the conditions of a valid Islamic commercial contract - offer and acceptance, identified subject matter, determinable price, capacity, absence of riba, gharar and maysir, and lawful purpose - with one defective counter-example per condition.

Classify eight everyday banking practices (late-payment interest, a fixed guarantee fee, a penalty donated to charity, currency forward, conventional insurance, overdraft interest, a money-back loyalty scheme, an undisclosed mark-up) as compliant or non-compliant and justify each verdict in one sentence.

Contrast the ethical axioms of Islamic banking (riba-free, risk-sharing, real-asset linkage, social justice) with the profit-maximisation premise of conventional banking and note where the two can align in practice.

Differentiate the liability-side accounts - current account (qard/amanah), savings account, unrestricted mudaraba investment account and restricted investment account - by ownership of funds, depositor risk, return entitlement and disclosure duty.

Draw the cash-flow and ownership sequence for murabaha, ijarah, salam, istisna, musharaka and mudaraba in a six-row diagram, marking the point at which title, risk and profit arise for the bank.

Compute a murabaha instalment schedule from a cost price, a disclosed profit mark-up and a tenor, and explain why a late-payment penalty may not be recognised as bank income.

Match five trade-finance needs (import letter of credit, export documentary collection, shipping guarantee, working-capital gap, receivable discounting) to a compliant structure and name the Sharia defect in the conventional alternative.

Summarise the treasury and fee-based lines a working candidate should recognise: commodity murabaha liquidity placement, wakala placement, FX spot and forward restrictions, kafala and ju'ala fees.

Explain the accounting treatment of murabaha (FAS 2), ijarah (FAS 8) and musharaka (FAS 4) under AAOIFI: recognition point, measurement basis, and when profit is taken rather than deferred.

Compute profit distribution to investment account holders using the weightage method, and show numerically how a transfer to the Profit Equalisation Reserve and the Investment Risk Reserve changes the payout to each account class.

Reconcile the balance-sheet difference between investment accounts presented on-balance-sheet as a liability versus off-balance-sheet as equity of investment account holders, and state the effect on ratios.

Explain how zakah and charity items are accounted for separately from bank income (per the AAOIFI zakah standard) and who bears the zakah obligation on investment accounts.

Identify the main gaps between local GAAP/IFRS presentation and AAOIFI financial statements that a candidate is likely to be tested on.

Map eight products to their dominant risks (credit, market, rate of return, displaced commercial, Sharia non-compliance, fiduciary) and mark which risk is the binding constraint in each case.

Compute and compare credit exposure for an outstanding murabaha receivable against an ijarah asset, and explain why collateral and repossession treatment differ between the two.

Diagnose a displaced-commercial-risk scenario: given a falling market profit rate, decide whether to draw on the PER, state the Sharia objection to smoothing, and identify the regulatory disclosure consequence.

Design a credit-approval checklist for a musharaka SME facility covering capital contribution, profit-sharing ratio, exit mechanism, security taken, and the Sharia documentation the file must contain.

Rank three mitigation techniques (security/collateral, guarantees/kafala, covenants and step-in rights) by effectiveness for salam and istisna exposures.

Contrast the wakala, mudaraba and hybrid wakala-mudaraba takaful models by who bears underwriting risk, how the operator is remunerated, and how the participants' fund is invested.

Explain the Sharia objections to conventional insurance (gharar, maysir, riba in invested funds) and show how each is addressed in a takaful arrangement.

Compute a surplus distribution for one takaful model from given contributions, claims, reserves and operator fee, and state who is entitled to the surplus and on what basis.

Explain retakaful, why a takaful operator needs it, and the Sharia constraints on the retakaful arrangement chosen.

Apply risk-management concepts from Domain 9 to takaful: underwriting risk, concentration risk in the participants' fund, and the operator's solvency obligation.

Distinguish the main sukuk structures (ijarah, murabaha, wakala, musharaka, mudaraba, salam, istisna, hybrid) by the underlying asset, the SPV role and the return source.

Draw the cash-flow and asset-transfer sequence of a sukuk al-ijarah from origination to maturity and mark the points where Sharia and credit risk sit.

Explain the difference between asset-backed and asset-based sukuk, and why recourse to the originator matters in default.

Apply the screening steps for an Islamic equity fund - business-activity exclusion, financial-ratio screens, purification of impermissible income, zakat on holdings, and the role of the fund's Sharia advisor.

Compare the fee and incentive structures of a mudaraba-based fund against a wakala-based fund and state the governance disclosure each requires.

Draft the terms of reference for a Sharia Supervisory Board covering composition, competence, independence, fatwa process, confidentiality, conflict of interest and removal.

Design five internal Sharia-audit tests (one each for murabaha documentation, profit allocation, zakat computation, product launch approval, and charity penalty disposal) and state the evidence each test requires.

Map the supervisory architecture: the regulator's licensing conditions, IFSB capital-adequacy and risk-management guidance, AAOIFI accounting and governance standards, and the role of the external auditor's Sharia-compliance report.

Explain Sharia non-compliance risk, its reputational and financial transmission channels, and how the governance structure is meant to contain it.

Distinguish the roles of the Sharia advisor, the internal Sharia auditor, the compliance function and the external auditor so you can assign a given failure to the right control.

Sequence the new-product development cycle in an Islamic bank (need identification, concept note, Sharia review ruling, risk and accounting sign-off, pilot, launch, post-launch Sharia audit) and name the document produced at each gate.

Critique Islamic branding claims against Sharia substance and explain what makes a brand message authentic rather than cosmetic.

Compare Islamic microfinance and SME structures (qard hasan, group-based murabaha, salam for agriculture, diminishing musharaka for equipment) on cost, risk and suitability for a low-income borrower.

Explain the Islamic social-finance toolkit - zakat, waqf and cash waqf, qard hasan, social/SDG sukuk - and distinguish which are charitable, which are return-bearing, and who governs each.

Synthesise the eight weeks into a one-page recall sheet linking domain, key instrument, key standard and key risk.