CM-8 CM-8 Islamic Contracts
CM-8.1 CM-8.1 Overview
CM-8.1.1
[This paragraph was deleted in April 2011].
CM-8.1.2
[This paragraph was deleted in April 2011].
CM-8.1.3
In order to monitor and identify any asset deterioration due to the Islamic contracts, the CBB requires additional disclosures (see Module BR) on the Islamic contracts undertaken by the bank during the period.
Amended: January 2011
October 2007CM-8.1.4
Definitions, disclosure requirements and method(s) of accounting treatments for some of the Islamic contracts are outlined below.
October 07Murabaha
CM-8.1.5
Revenue for the purpose of Murabaha contracts must be recognised on an accrual basis.
October 07CM-8.1.6
For a detailed definition, disclosure requirements and method(s) of accounting treatment, refer to AAOIFI's FAS 2: Murabaha and Murabaha to the Purchase Orderer.
October 07Mudaraba
CM-8.1.7
Revenue on Mudaraba contracts may only be recognised to the extent it is being distributed.
October 07CM-8.1.8
For a detailed definition, disclosure requirements and method(s) of accounting treatment, refer to AAOIFI's FAS 3: Mudaraba Financing.
October 07CM-8.1.9
As part of its on-going supervision of Islamic banks, the CBB has set out the type of terms and conditions (see Appendix BC-7) which it believes Islamic banks should include, as a minimum, in such contracts.
Amended: January 2011
October 2007Musharaka
CM-8.1.10
Under a Musharaka contract, losses are shared in proportion to the contributed capital. It is not permissible to stipulate otherwise.
October 07CM-8.1.11
For a detailed definition, disclosure requirements and method(s) of accounting treatment, refer to AAOIFI's FAS 4: Musharaka Financing.
October 07Salam
CM-8.1.12
As a policy no Salam contracts must be entered into without covering the position through a Parallel Salam contract.
Amended: July 2011
October 2007CM-8.1.13
Where the bank is not able to enter into a Parallel Salam contract it must agree a statement policy with the CBB.
Amended: January 2011
October 2007CM-8.1.14
For a detailed definition, disclosure requirements and method(s) of accounting treatment, refer to AAOIFI's FAS 7: Salam and Parallel Salam.
October 07Istisna'a
CM-8.1.15
As a policy no Istisna'a contracts must be entered without covering the position through a Parallel Istisna'a contract.
Amended: July 2011
October 2007CM-8.1.16
In accordance with provisions contained in FAS 10: Istisna'a and Parallel Istisna'a, revenue and profit on such contracts must be recognised on a percentage of completion method.
Amended: July 2011
October 2007CM-8.1.17
For a detailed definition, disclosure requirements and method(s) of accounting treatment, refer to AAOIFI's FAS 10: Istisna'a and Parallel Istisna'a.
October 07Ijarah and Ijarah Muntahia Bittamleek
CM-8.1.18
For a detailed definition, disclosure requirements and method(s) of accounting treatment, refer to AAOIFI's FAS 8: Ijarah and Ijarah Muntahia Bittamleek.
October 07Facilities Transferred to Qard Hassan
CM-8.1.19
The CBB's approval must be obtained before any transfer of any
exposures to Qard Hassan if the amount is more than BD 100,000 or its equivalent in foreign currency (see Paragraph BR-5.2.6).Amended: April 2014
Amended: July 2011
Amended: January 2011
October 2007CM-8.1.20
The requirement stated in Paragraph CM-8.1.19 above applies to both on-balance sheet and restricted investment account related
exposures .Amended: January 2011
October 2007
