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RM-5.3.15

Where appropriate, Islamic bank licensees should include in their contingency plans the following factors and define appropriate action points at each stage:

(a) Holdings of tradable high quality liquid assets, which may be readily disposed of in sizeable amounts in deep markets taking into account the likelihood that it will not be possible to realize full book value;
(b) Profile of other assets and the degree of liquidity of these assets;
(c) Assessment of Shari'a-compliant and available funding products in the market including possible cooperation agreements with either other Islamic bank licensees or conventional institutions on an interest-free basis for accessing temporary funding, or sale and leaseback arrangements for longer term funding;
(d) Establishment of a crisis management team or personnel responsible for taking actions at different stages of the liquidity crisis; and
(e) Notification procedures for communication with Islamic bank licensees' head office and/or supervisory authorities.
January 2013