Maputo, June 11 (ONA) The Sultanate and the Islamic Development Bank (IDB) signed today Istisna'a
Agency agreements according to which IDB will provide the Sultanate with $176 million worth loan (equivalent to almost RO 68 million) to finance 86% of the cost of water supply project from Wadi Dhaiqah to Muscat and Quriyat, which costs RO 79 million.
Islamic modes of financing like Murabaha, Musharaka, Mudaraba, Ijara, Salam, Istisna'a
and other Islamic modes of financing pose unique risk factors to Islamic Banks, which may be summarised as: Liquidity originated market risk ; transformation of credit risk to market risk and market risk to credit risk at various stages of a contract; bundling of credit risk and market risk, market risk arising from owning the underlying non-financial asset until maturity of a contract or until the ownership is transferred to customer and treatment of default As a result, there are unique balance sheet features of Islamic Banks from a Market risk perspective.
Other services on offer include: saving accounts; investment deposits, which offer the chance to invest in remunerative businesses, with profits awarded at the end of the deposit term according to the investments' performance; and real estate financing to help a customer own a new house through Murabaha, Ijara and Istisna'a
that cover up to 80 per cent of the value of the property over a maximum period of 20 years.
Although Islamic financial products are not explicitly mentioned in Basel II, the CBB has introduced, effective this year, a comprehensive Basel II compliant framework which provides for appropriate capital treatment of products such as Murabaha, Ijara, Istisna'a
, amongst others, he added.
A Two-step Sukuk with Combination of Istisna'a
Islamic bankers have developed a number of such methods, including murabaha (cost-plus financing), ijara (lease financing), musharaka (partnership finance), mudaraba (venture capital finance), and istisna'a
(construction or manufacturing finance).
Brian Kettell's book looks at all aspects of Islamic banking, including chapters on its creation and evolution through to detailed discussions of the issues involved in the Sharia'a contracts of Murabaha, Mudaraba, Musharaka, Ijara, Istisna'a
, and Salam.
On the sidelines of the meeting Istisna'a
Agreement and Istisna'a
Agency Agreement will be signed between the Sultanate's government and the Islamic Bank for Development to finance the water supply project from Wadi Dhaiqah to Muscat and Quriyat.
Ajman Bank's Shari'ah- compliant products are structured using Islamic financing techniques, among others: Mudaraba, Ijarah, Musharakh, and Istisna'a
AAOIFI is also carrying out, amongst others, revision of existing Shari'ah standards on Ijarah and Ijarah Muntahia Bittamleek, Salam and Parallel Salam, Istisna'a
and Parallel Istisna'a
, Sharika (Musharaka) and Modern Corporations, and Mudaraba.
Uses of Funds for both conventional and Islamic banks are similar, except that Loans & Advances in conventional banks are replaced by Murabaha, Musharaka, Istisna'a
, Salam or Ijara Receivables, which are the Sharia-compliant modes of financing practiced by Islamic Banks.
Second, the Russian legislation establishes a direct prohibition on participation of a credit organisation in manufacturing, trading and insurance activities, which eliminates the possibility for them to carry out such transactions as Murabahah, Istisna'a