The Univeristy of Lahore
Question
Asked 30th Sep, 2016
Islamic Finance, what are the option that we can can us for liquidity management ?
for exemple Sukuk it's one of this options, but i need more details
Most recent answer
As far as financial institutions are concerned, to improve liquidity, they have several Shariah investment products to be sold across the customers. Islamic banks do not give cash loans but they finance the assets required for invest and in turn sell them to the investor. For corporation perspectives, short-term liquidity can be improved using Morabaha facility (generally used to meet day to day cash flow needs). For long-term liquidity, Sukuk can be issued for BMR or expansion purposes. Sukuk as the Islamic alternative to bond (conventional product) is rapidly and steadily gaining ground across the countries especially in Sub-continent, Middle East, and African countries.
All Answers (11)
Indian Institute of Management Shillong
Can refer to a article written by s s Ali in 2013
1 Recommendation
Hi Zouher,
There you go!
1. Ijārah (Lease, lease purchase)
2. Istisna’ (Deferred payment, deferred delivery)
3. Mudarabah (Trustee finance contract)
4. Murabahah (Mark–up financing)
5. Musharakah (Equity participation)
6. Qard (Benevolent loan)
7. Salam (Prepayment, deferred delivery)
8. Sukuk Al Istithmar
9. Tawarruq
10. Wadi’ah (Demand deposits)
11. Wakalah (Agency)
Hope this helps.
Tecnológico de Monterrey
Dear Zouher,
I hope my publication below can help:
Al Janabi, Mazin A. M., “Proactive Risk Management in Emerging and Islamic Financial Markets: Evidence from the Moroccan Financial Markets”, Humanomics: Int. J. Systems and Ethics (HIJSE), Vol. 24, No. 2, pp. 74-94, 2008. [Publisher: Emerald Group Publishing Limited]
Best wishes
Mazin
Universiti Tunku Abdul Rahman, Malaysia, Kampar
Marketable papers which are structured based on those of any uquds used in muamalat can be engaged as islamic money market instruments.
The Univeristy of Lahore
Please read following 2 articles:
Liquidity management of U.S. global banks: Internal capital markets in the great recession
Liquidity risk management and credit supply in the financial crisis
Universiti Utara Malaysia
The profit and loss sharing principles namely Mudarabah and Musharakah partnership could provide a natural source of liquidity internally while money market can be used as secondary liquidity options for Islamic bank. However, the former were more stable against sudden shock during financial crisis.
The Univeristy of Lahore
As far as financial institutions are concerned, to improve liquidity, they have several Shariah investment products to be sold across the customers. Islamic banks do not give cash loans but they finance the assets required for invest and in turn sell them to the investor. For corporation perspectives, short-term liquidity can be improved using Morabaha facility (generally used to meet day to day cash flow needs). For long-term liquidity, Sukuk can be issued for BMR or expansion purposes. Sukuk as the Islamic alternative to bond (conventional product) is rapidly and steadily gaining ground across the countries especially in Sub-continent, Middle East, and African countries.
Similar questions and discussions
Related Publications
Purpose
We are beginning to observe the growth of Islamic finance beyond the borders of traditionally Islamic markets such as the Middle East and the Far East. The proliferation of such religious financial institutions in non-Islamic and more secular markets has raised some pertinent questions about how these quasi-religious institutions brand them...
This book features essays covering Islamic finance practice and the tax hurdles faced in different jurisdictions. The book highlights how the distinguishing features in Islamic finance do not hamper the economic purpose in most product structures and thereby, it makes a strong case for according tax neutrality for level playing field, enabling acce...
