Back Custom print Link Text Only Rich Text Print

  • BC-7 BC-7 Mudaraba contracts

    • BC-7.1 BC-7.1 Minimum Terms and Conditions

      • BC-7.1.1

        As part of its on-going supervision of Islamic banks, the CBB has set out in Appendix BC-7 details of the type of terms and conditions which it believes Islamic banks should include, as a minimum, in such Mudaraba contracts.

        Amended January 2011
        October 2007

      • BC-7.1.2

        All Mudaraba contracts entered into by an Islamic bank (whether new or renewed contracts) must meet the standards referred to under Paragraph BC-7.1.1.

        Amended: July 2015
        Amended January 2011
        October 2007

      • BC-7.1.3

        Banks must have a policy statement as to the policies and procedures in place to safeguard the interest of the PSIA holders. The statement must, as a minimum, cover the following areas:

        (a) Basis for allocation of profit or loss to the PSIA;
        (b) Policy for making provisions and reserves against assets and equity for PSIA (refer to FAS 11, issued by AAOIFI, for recognition and measurement of provisions and reserves) and to whom these provisions and reserves revert to in case of write-back or recovery;
        (c) Policy on the priority for investment of own funds and those of unrestricted investment account holders; and
        (d) Basis for allocating expenses to the PSIA.

        Banks must agree their Policy Statements with the CBB.

        Amended January 2011
        October 2007