FIN20013 Banking Operations and Governance - Tutoring 1

Tutoring 1

Question

PART A -- word limit : 1000 words
Islamic banking is a banking system based on the principles of Islamic or Sharia law and guided by Islamic economics. The significant growth of Islamic banking in the last decade, makes it a phenomenon that requires to be explored and analysed.

1. You are also required to identify differences between Islamic banking sector and conventional banking sector. You may discuss from the issues (but not limited to) the regulatory framework, business operations, products and other relevant aspects.
2. Despite its rapid growth, Islamic banking is facing enormous challenges to establish itself in the global banking industry. List and discuss three challenges, which in your opinion, are preventing Islamic banking from playing a more effective role.

(5 + 5 marks)

PART B -- word limit : 1000 words
The banking industry traditionally has a high barrier of entry with a lot of regulatory requirements. In the recent years, some countries around our region have been issuing virtual banking license, namely Hong Kong, Korea, Malaysia and Singapore. While there is no announcement from the Reserve Bank of Australia for the plan of issuing virtual banking license, it is commonly accepted in Australia we have neobank or digital bank.

Required:

1. Identify a neobank in Australia or a business entity which has recently being granted a virtual banking license. Discuss the services, product they offer.
2. What are some of the advantages of operating virtual bank? How are they different from the traditional banks?
3. What are some of the challenges faced by the virtual banks?

(2 + 4 + 4 marks)