Barclays Capital, the investment banking arm of London-based Barclays Plc, is offering Shariah- compliant repurchase agreements to allow Islamic banks and investors manage their funds.
Barclays introduced the product worldwide two weeks ago and is focusing on clients in Malaysia and the Middle East, where the largest Islamic financial institutions are based, Harris Irfan, the bank’s Dubai-based head of Islamic finance products, said in an interview “The product is ready to go out the door,” he said in an e-mailed response to questions Aug. 17.
The Islamic repurchase agreements from Barclays will be based on a Shariah-compliant sale and repurchase agreement and the underlying assets used as collateral, typically sukuk, won’t violate the religion’s ban on interest. The International Islamic Financial Market, a Bahrain-based agency founded by the central banks of Bahrain, Indonesia and Malaysia, this week proposed allowing third parties to act as intermediaries between buyers and sellers of sukuk used as collateral for short-term funds.
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