Regulatory Alerts2014-04-20
Special Murabaha Financing Contracts
The Central Bank of Bahrain establishes comprehensive regulatory requirements for Special Murabaha Financing contracts, mandating that banks offer these instruments exclusively to accredited investors through a dedicated special purpose vehicle with strictly segregated assets. The framework requires prior CBB approval, mandatory Shari'a supervisory board endorsement, and detailed pre-contract disclosures outlining risks, fees, and contractual rights in both English and Arabic. Additionally, banks must deliver biannual statements to investors and the regulator that track cash flows, asset valuations, and net profit or loss.
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