Credit Risk in Islamic Banks

Even though the counterparty's failure to fulfill its commitments on time and in line with the agreed conditions makes up part of the credit risk that can be diversified, it cannot be completely removed. This definition shows who's the definition.

• SC

• ISRA

• BNM

• BASEL

Credit risk is the possibility that a borrower won't ______ the end any contract or other arrangement with the bank. Based on the definition from Basel II, please indicate the answer in the blank space.

What's the importance of credit risk for Islamic banks?

• It enables Islamic banks to maximize profit by enabling them to make wiser and more suitable decisions.

• This will enable them to comprehend the issue and provide a thorough framework for managing credit risk

• To handle sales including in contract Murabahah and Istisna’ because it most significant risk for profit-loss sharing financing is credit risk.

• It can also result in economic and financial instability

What are credit risk situations in Islamic Banking Institutions primarily caused by?

• High interest rates

• Non-performing financing defaults by customers

• Government regulations

• Stock market fluctuations

How can changes in industry sectors, such as the oil and gas industry, impact the creditworthiness of borrowers at Islamic banks?

• Increase creditworthiness

• Have no impact

• Decrease creditworthiness

• Improve credit ratings

What is types of Credit Risk?

• Settlement Risk

• Reputational Risk

• Fiduciary Risk

• Loan Credit Risk

History of Credit Risk?

• Regulatory Evolution - Early Development - Post Global Financial Crisis - Technological Advancements

• Early Development - Post Global Financial Crisis - Regulatory Evolution - Technological Advancements

• Early Development - Regulatory Evolution - Post Global Financial Crisis - Technological Advancements

• Early Development - Regulatory Evolution- Technological Advancements - Post Global Financial Crisis

How do Islamic banks manage credit risk without charging interest?

• Profit and Loss Sharing (PLS)

• Risk Assessment and Monitoring

• Diversification

• All the answer above

What are the key factors influencing credit risk in Islamic banks?

• Quantity of Financing Assets

• Bank Size

• Financing Conditions

• Management risk