Bahrain-based International Islamic Financial Market (IIFM) said it has launched the global standard documentation on its inter-bank unrestricted master investment Wakalah agreement.

IIFM is the Islamic financial services industry’s standard-setting organization focused on the Islamic Capital & Money Market segment of the industry. Its primary focus lies in the standardization of Islamic financial products, documentation and related processes at the global level, said a statement fom the organisation.

This global standard document is supplemented with an Operational Guidance Memorandum, it added.

“This global standard documentation is developed to be used in the Islamic inter-bank market between financial institutions in order to manage their liquidity requirements. It is also aimed to minimize the over reliance on the use of the Commodity Murabaha in the inter-bank market transactions,” said Ijlal Ahmed Alvi, the chief executive officer of IIFM.

Khalid Hamad Abdul-Rahman Hamad, the executive director-Banking Supervision, Central Bank of Bahrain and chairman of the IIFM said, “The much-awaited documentation standard is another milestone in the standardization and harmonization of Islamic finance industry across the globe."

He reiterated that this welcome achievement by IIFM will spur the use of unrestricted Walakah in the Islamic inter-bank market and will encourage all the jurisdictions to implement this standard as well as address any accounting or regulatory requirements in their respective jurisdictions.

“The Operational Guidance Memorandum for the Wakalah agreement is one of the unique features of IIFM efforts to enhance the development of Islamic finance industry. The industry will find this Memorandum very useful whereby it explains how the standard to be used and in addition to that it provides very comprehensive recommendations,” said Alvi.

Dr Ahmed Rufai, the head of Shari’ah, IIFM said, "We have taken a pioneering role in producing standard documentation in specific areas for the Islamic finance industry in order to provide Shari’ah harmonization, best practices, transparency and clarity for sound business activities."

IIFM was founded with the collective efforts of the CBB, Islamic Development Bank (a multilateral institution based in Saudi Arabia), Autoriti Monetari (i.e. Monetary Authority) Brunei Darussalam, Bank Indonesia, Bank Negara Malaysia (delegated to Labuan Financial Services Authority) and the Central Bank of Sudan as a neutral and non-profit organization.-TradeArtabia News Service