Rules for Islamic banks’ money market
Star Business Report
The central bank has introduced a new call money market, Islamic Interbank Fund Market (IIFM), for shariah-based banks and financial institutions.
Bangladesh Bank (BB) laid out a set of rules, according to a statement released yesterday.
The decision to introduce the IIFM has been taken to discipline the liquidity management of all shariah-based banks, financial institutions and Islamic banking branches of the traditional financial institutions and banks operating in Bangladesh.
It said the transactions would be based on profit instead of interest.
According to the rules, if a bank has excess funds, it will invest the amount in the IIFM for a day, allowing another cash-starved Islamic bank to borrow for the same period.