 In this module, and quite a few modules to follow, we shall be considering treatment of risk in Islam. Islam recognizes incidents of risk in general life as well as in business transaction. All of us, we face risk of one type or the other. And Islam would recognize this possibility. There are various types of risks and their treatment in different context is different. If there is a personal risk, its treatment would be different from a business risk. And risks, if for example personal risk is in the form of credit risk, its treatment would be different from another business risk, which is for example market risk. If we grapple treatment of risk in Islam, it will be very easy for us to understand a number of Islamic modes of financing, their rationale and of course it would be very good for us in terms of understanding of a number of Islamic financial products offered by Islamic financial institution. What is risk? In simple language, risk is possibility of something undesired happening. Something I don't like, something I fear of and that happened. That is called risk and this could be with respect to my wealth, this could be with respect to my life, this could be with respect to something else. In a business context, it is considered as possibility of loss. And quantification of this is in the form of risk. For example, what is the possibility of loss of 100 rupees kept in the pocket or somewhere at home? If I have got certain amount of money, if I keep it in my wallet or at home, there is a certain possibility of loss. I might be able to drop my wallet or there is a possibility of someone stealing my money from home. So, there is a degree of risk involved in this context. What is the possibility of losing the same 100 rupees if the money is kept in a bank account? So, these two scenarios in your mind, they would have a different risk quantum. Many people, they would say that keeping the money in the bank is in general safer than keeping money at home. Now, if there is 10% probability of losing 100 rupees kept in the pocket or somewhere at home and there is no possibility of losing 100 rupees, if the money is deposited in a bank account, the question arises, can the bank charge you for safekeeping? Will this be considered as an example of pricing risk? Of course, when bank keeps your money, that is for safekeeping. It would not be considered as pricing the risk. Bank does not charge you in this context for reducing your risk. This is very, very important. Bank merely charges you for safekeeping. So, these minor or minute differences must be kept in mind when we are taking a juristic view on something in this context risk. Now, we said that the bank in the previous example is not pricing the risk. But the question arises, can the risk be priced? The bank may consider on its own the risk factor while determining the price of service of safekeeping. That risk thing is there in the price determination. However, risk is not something that can be bought and sold in an Islamic economic framework because remember one very important principle. Islam permits purchase and sale of the goods and services which have a benefit. We had initially said that risk is a bad thing. Risk is a possibility of loss. Hence, it cannot be bought and sold on its own in an Islamic economic framework. Let us look at this example. Person A, this guy has got some money and this person faces risk of losing half of the money it owns. So, this person has got 10,000 rupees and it faces a risk of losing half of it. Can this person A go to another person B and request him to charge him something so that whenever that risk happens, that loss happens, person B would be making that loss good. No, in general. However, this is the subject matter of insurance and we shall study it under the couple.