Mon, 29 Oct 2007
Asian Finance Bank and AmanahRaya Investment Bank Labuan have entered into an innovative Islamic forward binding transaction and agreed to establish an Islamic marine fund that is intended to raise USD250m.
Asian Finance Bank is an Islamic bank backed by a consortium made up of Qatar Islamic Bank (70 per cent), Saudi Arabia's RUSD Investment Bank (20 per cent) and Kuwait-based Global Investment House (10 per cent), while AmanahRaya Investment Bank Labuan is a wholly-owned subsidiary of the Malaysian state-owned trust company Amanah Raya established in the offshore financial centre of Labuan earlier this year.
According to the banks, the Islamic forward binding transaction, or AFB-i, is a contractual obligation by two parties to pay, on a forward value date, the price of a commodity purchased on the transaction date, to aid the exchange of currencies between the two contracting parties.
The transaction is based on the Shariah contract of Bai Muajjal, in which the bank's customer purchases assets with a deferred payment on a specific time in the future and the delivery of the assets on a spot basis.
Source :
http://www.hedgeweek.com/articles/detail.jsp?content_id=203666
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