CA-1.2 CA-1.2 Measuring fiduciary and displacement risks
CA-1.2.1
Islamic banks mobilise funds on a profit and loss sharing basis (PLS). However, certain risks are associated with such PLS accounts. These risks are referred to as fiduciary and displaced commercial risk.
October 07CA-1.2.2
To cater for these risks the Central Bank has accepted the recommendations contained in the AAOIFI's statements and requires the inclusion of 50% of the risk weighted assets of the Profit Sharing Investment Accounts (PSIA) in the denominator of the capital adequacy ratio.
October 07
