The financial services industry of Islam consists of anincreasingly vast number of institutions, such as investment and commercial banks, investment companies and mutual insurance companies. In Islamic banks effective risk management deserves special attention. However, it has numerous drawbacks that are required to be understood better. Risk management is about the attitude towards paying off and the strategies in dealing with them and the risks associated with it in relation to modern banking. As an operational problem, risk management is about the classification and identification of methods, processes and risks in banks to supervise, monitor and measure them.In comparison to conventional banks, Islamic banks face big difficulties in identifying and managing risks due to bigger complexities emerging from theprofit loss sharing concept and nature of particular risks of Islamic financing. This research investigates in detail the need for risk management in Islamic bank (Ilias, S. E. B. 2012).
Source: International Journal of Islamic Banking and Finance Research
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