Gulf Business: Bahrain’s Al Salam Bank has partnered with the Bahrain Bourse and the Central Bank of Bahrain (CBB) to offer a new Shari’a-compliant brokerage service.
The service will allow for the use of Bahrain-issued Ijara sukuk as the underlying asset in Murabaha financing frameworks, meeting a growing demand for Shari’a-compliant alternative financing solutions, which has prompted a rise in global sukuk issuances.
The Bahrain Bourse and CBB have partnered with banks to create a local Shari’a-compliant trading framework using CBB-issued sukuk as the underlying asset, so that local banks are no longer solely reliant on pre-traded commodities from overseas brokers in order to comply with Shari’a standards.
The new service will also provide reductions in fees for customers and in processing time for offering banks.
Rafik Nayed, group CEO of Al Salam Bank-Bahrain, said: “This latest service introduces a new underlying asset to our existing Murabaha financing structure, which until now has been conducted via local and international brokers. The new product not only further diversifies the commodities available to our clients seeking Shari’a-compliant products, but also provides them with a more streamlined service as it is actioned via a digital system which significantly decreases processing time.”
“The newly offered Ijara-based Murabaha service is set to address the growing market demand for Shari’a-compliant Ijara Sukuk, while further enhancing Bahrain’s capital market offering and creating new opportunities for investment on both a regional and global scale. Al Salam Bank has firmly positioned itself as a pioneer when it comes to innovation in Islamic Finance, and make a fitting partner for this timely and important initiative, which has the potential to further advance Islamic Banking,” added Shaikh Khalifa bin Ebrahim Al Khalifa, CEO of Bahrain Bourse.
https://gulfbusiness.com/bahrains-al-salam-bank-partners-with-bahrain-bourse-central-bank-on-new-sharia-compliant-framework/
