"Islamic banks in Oman are building a counterparty network for wakala, a sharia-compliant agency agreement, to use as a major tool for their interbank funding needs.
A viable wakala market could help Omani banks' profitability and, if it is imitated elsewhere in the Gulf, challenge the dominance of commodity murabaha, a cost-plus-profit arrangement that is popular in other countries.
Last week, a bilateral wakala agreement was signed between Bank Nizwa, Oman's first full-fledged Islamic bank, and the Islamic unit of Bank Sohar which allows the lenders to place surplus funds with each other."
'via Blog this'
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