Trade Credit Insurance and Trade Credit Takaful Exposure Draft

Trade credit insurance and trade credit takaful protect businesses against the risk of non-payment of goods and services by buyers. These products can also help businesses manage country risk, thereby opening access to new markets. For financial institutions, trade credit insurance and trade credit takaful can be used to manage risks in their trade financing portfolios.

This policy document aims to clarify the approval process and other requirements for the offering of trade credit insurance and trade credit takaful by licensed insurers and takaful operators, respectively. It also sets out the treatment of trade credit insurance and trade credit takaful as credit risk mitigation (CRM) under the Capital Adequacy Framework for banking institutions.

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