Operational Lease Risk Management in Islamic Banks and Islamic Financial Institutions - A Comparative Study between Jurisprudence and Jordanian Law

Abstract

This research paper aims to examine the risk management practices associated with operational lease contracts in Islamic banks and Islamic financial institutions, specifically focusing on a comparative analysis between Islamic jurisprudence and Jordanian law. Operational lease agreements are a widely used financing tool in Islamic finance, providing an alternative to conventional lease arrangements. However, like any financial transaction, operational leases carry inherent risks that need to be effectively managed. This study investigates the risk management frameworks and approaches employed by Islamic banks and financial institutions in light of both Islamic principles and the legal environment in Jordan. By comparing the two frameworks, the research seeks to identify the strengths and weaknesses of each system and propose recommendations for enhancing operational lease risk management practices in Islamic finance.