Manama: Khaleeji Commercial Bank (KHCB), one of the leading Islamic banks in Bahrain, has signed an agreement with Bahrain Bourse (BHB) to utilise the ijara sukuk issued by the Central Bank of Bahrain (CBB) as underlying assets to complete murabaha financing – a new and innovative Sharia-compliant brokerage service introduced by the BHB through its electronic platform in replacement of commodity murabaha.
BHB chief executive Shaikh Khalifa bin Ebrahim Al Khalifa, CBB banking operations executive director Shaikh Salman bin Isa Al Khalifa and KHCB CEO Sattam Al Gosaibi signed the agreement through videoconferencing.
Under the agreement, KHCB will be able to benefit from the innovative service by expanding its asset management and introducing diversified financial solutions that serve various fields. It will also reduce the time needed to complete transactions related to murabaha financing, as the purchasing and selling process is done through BHB as a local broker and through an advanced electronic platform.
Mr Al Gosaibi said: “This agreement comes as a new addition to the process of developing the banking services offered by the bank. It also reinforces our leading products and services, which we have begun to formulate a supportive digital infrastructure in line with the bank’s new strategy.”
“The sukuk murabaha service with the BHB will meet the growing demand for Sharia-compliant financing solutions. This will contribute to the improvement of services provided to our valuable clients, in addition to cementing the distinguished position of Bahrain as a leading financial hub for Islamic banking,” he said.
“We value sincere efforts exerted by the CBB and BHB to develop this sector through the introduction of such leading initiatives.”
Shaikh Khalifa said: “We are delighted to have KHCB on board with us in this initiative. The new murabaha service through ijara sukuk is considered one of many innovative and Sharia-compliant solutions that aim to meet banks’ increasing demand, as well as allow participating financial institutions to offer Sharia-compliant murabaha services to clients.”
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