You are on page 1of 9

MONEY MARKET

PRODUCT
OFFERED BY BANK ISLAM MALAYSIA
BERHAD

Interbank Investment Account


(Mudarabah) (IIA Mudarabah)

wholesale money market transaction designed as liquidity


management instruments in the Islamic Money Market. Based on
a profit sharing concept, its features :

a joint venture between two interbank counterparties where the


surplus bank invests or place funds with the deficit bank

then negotiate and agree on the amount, tenor of investment


and profit sharing ratio

accepting bank also will not guarantee the investors principal


amount on the investment activities

Profit is paid on the maturity date based on the receiving bank


prevailing gross rates and the sharing ratio of the investing bank.

Applicable Shariah concept

Mudarabah (Profit sharing)

A form of partnership between one who contributes capital (rabb


al-mal) and the other contributes efforts in the form of
managerial skills (mudarib). Profit is shared between the capital
provider and manager according to mutually agreed profit
sharing ratio whilst losses are borne solely by the capital provider

Types of Interbank Mudarabah

Mudarabah Interbank /Placement (MIP)

Mudarabah Interbank Acceptance (MIA)

Foreign Mudarabah Placement (FMIP)

Foreign Mudarabah Acceptance (FMIA)

Interbank Investment Account


(Wakalah) (IIA Wakalah)

wholesale money market transaction designed as liquidity


management instruments in the Islamic Money Market. Based on
a contract of Wakalah (Agency) with the objective of making a
profit, its features are all but not limited to the following:

surplus bank appoints the deficit bank as its agent to invest the
funds in the deficit banks banking activities with the intention of
making a profit

then negotiate and agree on the amount, tenor of investment


and the expected rate of return

The accepting bank will not guarantee the investors principal


amount on the investment activities. Profit is paid on the
maturity date based on the actual return of the accepting bank.

Applicable Shariah concept

Wakalah bil istithmar


An investment agency contract in which the capital
provider(muwakkil)mandates his agent(wakil)to perform
particularmuamalahtransaction or investment and in return the
agent will receive a fee(ujr)for the service.

Profit Rate

Rate of return for Interbank Wakalah is based on the actual return


of the accepting bank (Wakil) on the maturity date. However, if
Bank Islam is the Wakil for the above contract, the profit to be
paid to the investing bank (Muwakkil) will be based on the
following conditions:

If the actual return is above the Expected Return, the Bank will
only pay the Expected Return to the Muwakkil. Any excess profit
will be retained by the Bank as a performance incentive.

If the actual return is below the Expected Return, the Bank is


obliged to pay the actual return to the Muwakkil.

Types of Interbank Wakalah

Wakalah Interbank Placement (WIP)

Wakalah Interbank Acceptance (WIA)

Foreign Wakalah Interbank Placement (FWIP)

Foreign Wakalah Interbank Acceptance (FWIA)

Comparison of Key Features

You might also like