This study examines the level of risk management practices among Islamic banks listed under Bank Negara Malaysia, and Islamic banks under the State Bank of Indonesia. This study is an avenue for contributing to the development of risk management practices for the Islamic banking system. The usable data for Malaysia is 136 questionnaires and for Indonesia 70, which gives a total sample of 206. The results show that there are significant differences between Malaysia and Indonesia in terms of the level of risk management practices (RMP), the level of understanding risk management (URM), risk identification and analysis (RAA), as well as risk control and monitoring (RCM). Further analysis indicates that the Islamic banks in Malaysia need to give more attention to risk identification (RI) and RAA whereas their counterparts in Indonesia need to consider URM, RI and RAA to improve their risk management practices.

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