Origin of Risk, Definition, Risk Management and its Application in Islamic Finance
رسک کا ماخذ، تعریف، رسک مینجمنٹ اور اسلامی مالیات میں اس کا اطلاق
Keywords:
Risk, Risk Management, Islamic Financial InstitutionsAbstract
Risk refers to the likelihood of incurring loss in the future. Humans have always sought to minimize the risks and losses that they may face by taking into account their past experiences. This has led to the development of risk management, which involves strategies and techniques to either eliminate or minimize risks. Over time, risk management has evolved into a recognized field of study, taught in universities and colleges and the subject of various workshops and seminars worldwide. In financial institutions, the significance of risk and risk management is paramount, as it deals with potential financial losses from unforeseen events. In Islamic financial institutions, risk management has an added importance as it must comply with the principles of Shariah, ensuring that no methods used cause any violation. This paper provides an overview of the concept of risk, tracing its origins to ancient times when the likelihood of an outcome was a concern for humanity. The study focuses on the application of risk in Islamic finance and reviews previous research, highlighting the different ways risk has been defined in various fields. The main issue addressed is the source of deviation from the path leading to harmful effects. This study aims to fill the gap in existing literature by exploring the concept of Shariah risk and its potential impact on determining capital requirements in Islamic financial institutions.
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