Bahrain’s Al Salam Bank partners with Bahrain bourse, Central Bank on new Shari’a-compliant framework

Bahrain’s Al Salam Bank partners with Bahrain bourse, Central Bank on new Shari’a-compliant framework

Bahrain's Al Salam Bank has partnered with the Bahrain Bourse and the Central Bank of Bahrain (CBB) to offer a new Shari'a-compliant brokerage service.

The service will allow for the use of Bahrain-issued Ijara sukuk as the underlying asset in Murabaha financing frameworks, meeting a growing demand for Shari'a-compliant alternative financing solutions, which has prompted a rise in global sukuk issuances.

The Bahrain Bourse and CBB have partnered with banks to create a local Shari'a-compliant trading framework using CBB-issued sukuk as the underlying asset, so that local banks are no longer solely reliant on pre-traded commodities from overseas brokers in order to comply with Shari'a standards.

The new service will also provide reductions in fees for customers and in processing time for offering banks.

Rafik Nayed, group CEO of Al Salam Bank-Bahrain, said: "This latest service introduces a new underlying asset to our existing Murabaha financing structure, which until now has been conducted via local and international brokers. The new product not only further diversifies the commodities available to our clients seeking Shari'a-compliant products, but also provides them with a more streamlined service as it is actioned via a digital system which significantly decreases processing time.“

"The newly offered Ijara-based Murabaha service is set to