The collateral used as a part of CRM must be compliant with Shari'a requirements. The collateralisation²⁸ must be properly documented in a security agreement or in the body of a contract to the extent permissible by Shari'a, and must be binding on all parties and legally enforceable in the relevant jurisdictions. The Islamic bank licensee must ensure that the CRM documentation is legally enforceable and must carry out periodic reviews to confirm its enforceability at all times. The Islamic bank licensee cannot recognise a commitment to provide collateral or a guarantee as an eligible CRM unless such a commitment is actually executed.

²⁸ Generally, in banks such collateralisation takes place under the concept of "Rahn" or "Kafalah".