DMD Circular Letter No. 05: Amendment of Guidelines and Operating Procedures of Islamic Banks Liquidity Facility (IBLF)

50119

Bangladesh Bank
(Central Bank of Bangladesh)
Head Office
Motijheel, Dhaka-1000
Bangladesh.

Department of Data Management

11 Chaitra 1430
Date: -------------------
25 March 2024

DMD Circular Letter: 05

Managing Director / Chief Executive
All Shari'ah Based Banks and Islamic Branches/Windows of Conventional Banks in Bangladesh

Dear Sir,

Regarding the Amendment of Guidelines and Operating Procedures of Islamic Banks Liquidity Facility (IBLF).

Reference is drawn to the 'Islamic Banks Liquidity Facility (IBLF)' introduced through DMD Circular No. 03/2022 dated 05 December 2022, with a view to the proper liquidity management of Shari'ah Based Banks and to strengthen the Islamic financial system.

2. In the context of operationalizing the IBLF for both full-fledged Islamic Banks as well as Islamic Branches and Windows of Conventional Banks, and in re-determining the tenor and promised profit rate of the IBLF, the instructions provided in paragraphs B and C(1,2) of the existing Guidelines and Operating Procedures of Islamic Banks Liquidity Facility (IBLF) are hereby replaced as follows:

B. Eligible Participants
Shari'ah Based Banks and Islamic Branches or Windows of Conventional Banks maintaining Current or Al-Wadiah Account with Bangladesh Bank (BB) are eligible to participate in the IBLF.

C. Features of the Islamic Banks Liquidity Facility (IBLF) 1. Tenor: 7, 14 and 28 days.
2. Profit Rate: 01 (one) month MTDR (Mudaraba Term Deposit Receipt) rate of the respective bank. If there is no one-month MTDR rate, then the profit rate of next higher-term deposits/MTDR declared by the respective bank shall be considered as the provisional profit rate of IBLF.

3. Other instructions of the said Guidelines and Operating Procedures shall remain unchanged.

4. These instructions shall take effect immediately.

Yours faithfully,

(Signature)
(Istekmal Hossain)
Director (DMD)
Phone: 9530131
E-mail: istequemal.hussain@bb.org.bd

Phone: 88-02-9550448, 9554896, IP: 88-02-55685001-6, Fax: 88-02-9530479, www.bb.org.bd