Friday, March 10, 2017

Meezan Bank to establish murabaha platform at PMEX

KARACHI: The Shariah Supervisory Board of the Meezan Bank has approved guidelines to establish a local commodity murabaha platform at Pakistan Mercantile Exchange (PMEX), a statement said on Thursday.

The board, in its 30th meeting held under the chairmanship of former justice Muhammad Taqi Usmani recently, also directed the Meezan Bank to ensure that all the requirements for a Shariah-compliant genuine sale transaction are met.

The guidelines would facilitate real sale and purchase of commodities in the ready market, while ensuring that a proper delivery mechanism is in place. This would further enable PMEX customers to avail of physical delivery easily, it added.

The board also reviewed and discussed various solutions for resolving excess liquidity situation for Islamic banks and evaluated the working procedures of three major international commodity murabaha platforms, including Bursa Malaysia, DMCC Dubai and London Metal Exchange used by the international Islamic banks for managing their excess liquidity, it said.

Restricted investment avenues for Islamic banks have been a major challenge, putting the international financial institutions (IFIs) at a competitive disadvantageous position.

Moreover, Islamic banking industry is looking to find solutions for excess liquidity management, while the government is looking for Shariah-based financing solution to move away from the interest-based borrowing.


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