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RM-5.3.2

Islamic bank licensees must maintain adequate liquidity to meet their obligations at all times. In this regard and taking into consideration the nature of the Islamic bank licensees, its business activities and its capital market environment, the Islamic bank licensees must have in place liquidity management policies, which must be reviewed periodically by the Board, covering:

(a) Strategy for managing liquidity involving effective board of directors (BOD) and senior management oversight;
(b) A framework for developing and implementing sound processes for measuring and monitoring liquidity;
(c) Adequate systems in place for monitoring and reporting liquidity exposures on a periodic basis;
(d) Adequate funding capacity, with particular reference to the board s assessment of the willingness, ability and likely support of shareholders to provide additional capital when necessary;
(e) Access to liquidity through fixed asset realizations and arrangements such as sale and lease-back; and
(f) Liquidity crisis management.
January 2013