Risks are significant and become more complicated in Islamic banks compared to conventional banks, since, the uniqueness of contractual features and general legal environment. The complexity of contracts could raise the risks of Islamic banks. Different types of risks in Islamic banks have attracted more attention from the regulators, practitioners and also academics over the last decade. This study will assess key challenges and management of risks in Malaysian Islamic banks. Analysis used in this study is regarding to previous studies as to deliberate the challenges of different types of risks in Islamic banks. The empirical studies in this study will fill the gap to the existing literature of risks in Islamic banks by showing the needs of specific adaption of risk measurement and risk management practices due to the nature of Islamic banks.
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