MANAMA: Al Baraka Islamic Bank and Bahrain Bourse (BHB) have signed an agreement allowing the bank to buy and sell Sharia-complaint ijara sukuk through the exchange, which will contribute to facilitating the bank’s financing operations for its underlying clients.
The agreement aims to diversify the commodities available for underlying clients when conducting a commodity-based murabaha transaction to include government-based sukuk issued by the Central Bank of Bahrain.
The service aims to provide significant reductions in processing time for the bank, and is playing a growing role in the expansion and position of Bahrain as a hub for Sharia-complaint financing.
Commenting, Al Baraka Islamic Bank Bahrain business group general manager Tariq Kazim said the agreement aims at enhancing the bank’s role in investing in government leasing sukuk, which will expand the investor base in these sukuk on the one hand, and diversify the sources of financing these issues on the other.
“This will enable the bank also to play a greater role in providing financing to clients who can use the proceeds from the sale of these sukuk to finance their needs,” he added.
The partnership was enabled by the Central Bank of Bahrain and Bahrain Clear.
BHB chief executive Shaikh Khalifa bin Ebrahim Al Khalifa said the use of the Murabaha platform would help Al Baraka Islamic Bank expand its Sharia-compliant solutions and diversify services provided by the bourse.
“Further, the service aims to offer unique advantages to Al Baraka Islamic Bank and its customers with Sharia-compliant solutions and trading opportunities to meet their growing needs and further position the kingdom as a hub for such transactions,” he added.
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