Credit Risk Management Practices in Islamic Banking: A Literature Review
List of Authors
  • Farah Nadirah Abdul Manan, Murni Yusoff

Keyword
  • credit risk, bank performance, risk management, Islamic banking

Abstract
  • Credit risk management is a critical aspect of banking operations, aimed at identifying, assessing, and mitigating the risks associated with lending activities. In the context of Islamic banking, credit risk management holds particular significance as it involves adhering to Shariah principles while ensuring financial stability and profitability. Therefore, the objective of this study is to explore the credit risk management practices employed by both full-fledged Islamic banks and Islamic subsidiaries of conventional banks. The study adopted document analysis as a method of analysis. Expected findings of this study includes the reviews and discussion on understanding the credit risk management practices of both types of institutions as it is crucial for enhancing risk management effectiveness, ensuring financial stability, and maintaining investor confidence. This study will help to inform policymakers, regulators, and practitioners in formulating robust credit risk management frameworks tailored to the unique characteristics of full-fledged Islamic banks and Islamic subsidiaries of conventional banks.

Reference
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