Regulatory Alerts2018-01-11
Operating Manual for Islamic Certificates of Deposit (Murabaha Model)
The Central Bank of Iraq has issued an operating manual establishing a Sharia-compliant framework for Islamic Certificates of Deposit (ICDs) on the Murabaha model to manage liquidity and invest excess banking funds. The manual mandates a structured seven-phase electronic auction process wherein the Central Bank purchases commodities from authorized Islamic banks, sells them to commercial intermediaries, and settles fixed profit margins upon maturity. It further enforces strict Sharia audit procedures to guarantee commodity validity, penalty-free execution, and clear margin definitions throughout the trading lifecycle.
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