An Islamic money market operating worldwide among financial institutions adhering to Sharia law will likely to go operational in October, a senior Bahrain-based banker was quoted by the Gulf New as saying.
Several new instruments that aim to gainfully employ the banks' short-term liquidity will be floated at this stage, he said.
The Bahrain Monetary Agency has taken the lead in coordination with Malaysia's Labuan Offshore Financial authority and Jeddah-based Islamic Development Bank, the daily added.
"While Islamic banking services have been around for over 25 years, they have traditionally offered products for the medium or long term," said Murad Ali Murad, CEO and general manager of Bank of Bahrain and Kuwait (BBK), and chairman of Bahrain Bankers' Society, on the sidelines of Abtec 2001.
"Bahrain is now working very hard to set up an Islamic money market and bring in instruments that use short-term liquidity." The products would be "equivalent to money market products" yet compliant with Sharia law, he said.
BBK has a 65 per cent Islamic institutional subsidiary in Al Khaleej Islamic Investment Bank.
Murad said that there is no conflict in Islamic banks using the Internet to offer electronic services – Albawaba.com
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