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CA-9.1.8

An Islamic bank licensee can provide real estate financing on the basis of Ijara, IMB, diminishing Musharakah, Murabahah and Istisna. Except for operating Ijara, use of other contracts to provide real estate finance to customers will commonly fall in the category of financing. The RWs for these exposures must be calculated based on the Rules provided in the relevant Sections, as set out below:

(a) IMB: Section CA-3.5;
(b) Diminishing Musharakah: Sections CA-4.8;
(c) Murabahah: Section CA-3.2;
(d) Istisna: Section CA-3.4; and
(e) For all the above contracts used to provide real estate financing, the RW of a debtor, counterparty or other obligor can be reduced and given preferential treatment if criteria mentioned in Section CA-4.2 are applicable.
January 2015