Saudi bank signs with Bank Negara


KUALA LUMPUR: Saudi Arabia-based Saudi Hollandi Bank has signed a Commodity Murabahah agreement with Bank Negara in Dubai, making it the first Islamic banking institution outside Malaysia to do so. 
Bank Negara said the Commodity Murabahah Programme (CMP) introduced in March was part of its diverse range of policy instruments in managing short-term liquidity in the Malaysian Islamic interbank money market. 
"Commodity Murabahah is a cash deposit product based on the globally acceptable Islamic concept of underlying commodity transactions to facilitate liquidity management and investment. 
"The CMP is a commodity-based transaction that utilises crude palm oil based contracts as its underlying asset," it said in a statement issued on Thursday. 
Earlier this year, Bank Negara had executed master agreements with eight Islamic banking institutions in Malaysia. 
This programme is part of the central bank's efforts to spur product innovation in facilitating the liquidity management of Islamic financial institutions. 
The participation of foreign Islamic financial institutions would further strengthen the cross-border inter-linkages as well as investment flows between Islamic financial centres, Bank Negara said



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