UK Central Bank Launches Islamic Banking Liquidity Consultation

UK Central Bank Launches Islamic Banking Liquidity Consultation
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assignment_ind Ambrose
today 9th April 2017
Photo : Bank of England

Central Bank Looking to Implement Fund Based Deposit

Shari’ah compliant liquidity facilities Consultation paper looks at establishing a fund based deposit facility for UK Islamic Financial institutions.

The work to develop a Shari’ah compliant facility commenced in the second half of 2015, and is part of the Bank’s more general approach to broadening market access to central bank liquidity facilities. The Bank recognises that Islamic banks are currently unable to use the Bank’s existing facilities because they involve interest, which is not deemed Shari’ah compliant. In particular, the Sterling Monetary Framework is the mechanism by which the Bank sets interest rates.

Download Consultation Paper

pdf UK Central Bank Consultation Paper