MANAMA, 8 April 2008 — The commodity Murabaha market, with a current size of about $100 billion, has emerged as one of the most rapidly growing Shariah-compliant instruments in the global banking industry, a senior official at the Bahrain-based International Islamic Financial Market (IIFM) has said.
Ijlal Alvi, chief executive officer of the IIFM, said that his organization was in the final stages of developing the first-ever standardized Master Agreement, which can be used by Islamic financial institutions across the globe.
The Master Agreement for Treasury Placement (MATP) is a benchmark document, which is currently undergoing a final review by leading Islamic financial institutions and conventional institutions offering Islamic finance, to be followed shortly by a final Shariah review by prominent scholars.
The MATP will significantly facilitate the Islamic banking industry’s commodity Murabaha transactions, which form the bulk of Islamic market transactions.
He said: “Due to the shortage of other Shariah-compliant instruments, commodity Murabaha is the main and most widely used Islamic money market product for liquidity management purposes by Islamic financial institutions.”
