Society for Worldwide Interbank Financial Telecommunication (Swift), in collaboration with The Association of Islamic Banking Institutions Malaysia (Aibim) and the Malaysian Islamic financial community, has launched a new rulebook for the usage of Swift message types (MT) messages for Islamic finance.

The MUG is a group of users that have registered to use specific messages within a controlled user community. The MUG is open to all markets, globally, that wish to utilise financial messaging compliant with practices in the Islamic finance industry. It is available for Islamic finance practice covering all FIN MT messages. The MUG also acts as a good registration mechanism for adherence to this Islamic finance rulebook and enforces processing of messages in accordance with the Islamic finance practice. 

This rulebook will provide greater clarity around Swift MT message usage based on Islamic principles in order to enable straight-through processing (STP), thereby improving efficiency as well as reducing risk and cost.

It will provide an efficient platform for exchanging Islamic finance messages and further promote the usage of message standards.  

Sido Bestani, head of Middle East, North Africa and Turkey at Swift, said: “Islamic banking is flourishing, not just in South Asia, the Arab region and other countries of the Middle East, but also globally. Bahrain has traditionally been a centre for Islamic Banking and Finance in the Gulf region; the UAE unveiled plans this year for Dubai to become the global capital of the Islamic economy; and the governments of the UK and Germany have recently issued sukuk, or shariah-compliant bonds. This is clearly a growing sector within the banking and finance industry and our customers are looking at Swift to assist them in standardising and automating processes in Islamic financial institutions. Swift has been working with some large Islamic banks in the Gulf for the past five years to adapt Swift standard messages to Islamic finance transactions such as Murabaha, in order to use Swift network/messages for such instruments.” – TradeArabia News Service