Malaysia National Bank Introduces New Islamic Instrument "Collateralised Murabahah"

KUALA LUMPUR, May 30 (Bernama) -- Malaysia National Bank (Bank Negara) on Wednesday announced introduction of a new Islamic monetary instrument, Collateralised Murabahah. It said Collateralised Murabahah is essentially a Shariah-compliant financing secured by assets in which the financier has the right to sell the asset should the client fail to repay the financing. "It combines the widely accepted Murabahah financing transaction with sukuk (Islamic bond) that forms the pledged asset to back the transaction," it said in a statement. The central bank said Collateralised Murabahah will be a new low credit-risk financial instrument that enables collateralised interbank transactions in the Islamic Money Market in Malaysia. "It will add diversity to existing liquidity management tools and further promote greater liquidity in the Islamic financial market," it said. Collateralised Murabahah can be used by Islamic financial institutions to obtain liquidity from Bank Negara under the standing facility and it will also be expanded to facilitate daily Islamic money market operations in the interbank market, it added. -- BERNAMA