The Islamic finance industry faces the same fundamental challenges and risks as that of conventional finance, including whether or not clients can fulfill their repayment obligations and when. However, recovery under Islamic finance principles is a significantly more sensitive undertaking and Islamic banks have to be very careful about how they approach the recovery process. Given the lack of precedent in such cases, effective documentation and a clear understanding of Shariah principles and other regulations is essential.
This intensive two-day program will provide delegates with a clear understanding of the key regulatory and Shariah issues surrounding the recovery of Islamic facilities as well as crucial legal, procedural and documentation issues to consider when defaults or problems occur. Real-life case studies will be used to examine important precedents and to develop delegates’ understandings of the application of these principles.
KEY LEARNING OUTCOMES
Understand Key Guidelines and Regulations Governing Recovery for Islamic Financing
Gain Insight on Shariah perspectives and Issues Affecting the Recovery and Resolution Process
Examine Legal Procedures and Issues in Default and Recovery – Where do Problems Happen?
Understand Legal Considerations in Drafting Effective Documentation
Assessing options for Dispute Resolution in the case of Islamic Financial Products
Benefits of Attending
Understand the key guidelines and regulations on the recovery process for Islamic financing
Gain insight into important Shariah perspectives and issues affecting the recovery and resolution process
Learn the legal procedures and issues in default and recovery – where can problems occur?
Understand the legal considerations in drafting documentation and its associated issues
Assessing options for dispute resolution in the case of Islamic financial products
Who Should Attend
This course is relevant to personnel in the relevant functions of:
Retail, commercial and SME Islamic banking
Credit administration & credit recovery
Credit control & collections
Accounts receivable
Operations
Compliance
General counsel
Agenda
Day One :9.00am – 5.00pm
Objectives of Shariah - a Concise Review
This essential session provides a refresher of key Islamic finance and Shariah principles and how they dovetail with commerce, banking and finance.
Classification of Shariah and its key and vital components
Objectives of Shariah with regard to transactions and commerce
Shariah from the commercial & banking perspectives – what you need to know
Application & Product Features of Shariah Contracts
In this session we shall examine key product structures and how they fit into the Islamic finance system. At the same time we shall be considering where crucial risks and potential problem areas may lie.
Bai’ Bithaman Ajil and Bai’ Inah
Murabahah
Wakalah
Bai’Al-Dayn
Kafalah
Murabahah Tawarruq
Al Ijarah Thumma Al Bai (AITAB)
Modus Operandi via Case Study Analysis
Documentation for Business Financing Products
This session will analyze documentation issues with regard to specific business financing structures. Again, we shall be looking for potential flashpoints and where problems may occur in the case of default.
Bai’ Bithaman Ajil and Bai’ Inah
Murabahah
Murabahah Tawarruq
Al Ijarah Thumma Al Bai (AITAB)
Legal Documentation for Islamic Financing Facilities
This session will help delegates understand the legal framework governing Islamic banking, as well as the key differences between how an Islamic bank may act as compared to an Islamic bank.
Differences between Islamic & conventional banking
Issues & challenges faced by Islamic financial institutions
Legal framework governing Islamic banks – what Islamic finance institutions can and cannot do
How significant is this?
Day Two :9.00am – 5.00pm
Types of Legal Documentation
What are the key documents that bankers need to be familiar with? Effective structuring and legal drafting early on can avoid significant problems in the case of default.
Letter of offer/supplementary LO
Primary & secondary documents
Uses and structure of guarantees
Charge documents
Others (RD, option to purchase, undertaking and others)
Sharing of security with conventional loans – how can this be done?
Early settlement/Ibra’ issues
Common Mistakes & Issues in Legal Documentation
Rescheduling & Restructuring of Islamic Financing
Debt Recovery Procedures
Understand the tools and courses of action available to an Islamic bank and how the case of default under Islamic finance differs significantly to conventional finance. What can an Islamic bank do and what steps can practically be taken from a legal perspective?
Objectives of recovery
Recovery techniques & strategies – what courses of action are realistically available to an Islamic bank
Foreclosure proceedings – know the process and avoid the pitfalls
The situation with civil proceedings
Statement of claim
Mediation, Arbitration and Dispute Resolution Options for Islamic Financial Products
