Islamic collateralised funding is imperative to the liquidity management in the Islamic Interbank Money Market (IIMM). In this regard, sell and buy back (SBBA) transaction and collateralised commodity murabahah (CCM) transaction are Islamic financial instruments used to source and provide funding for liquidity management in the IIMM.
This policy document aims to–
(a) set out the scope of an SBBA transaction and a CCM transaction that can be conducted by a banking institution participating in the IIMM;
(b) set out regulatory requirements and Bank Negara Malaysia’s (the Bank) expectations in relation to an SBBA transaction or a CCM transaction entered into by a banking institution;
(c) promote sound risk management practices by a banking institution for the conduct of an SBBA transaction or a CCM transaction; and
(d) ensure compliance by a banking institution with Shariah principles when it enters into an SBBA transaction or CCM transaction.
This document belongs to Bank Negara Malaysia (BNM). Full access to the original source is available here: https://www.bnm.gov.my/banking-islamic-banking
