Regulatory Alerts2024-03-25
Added
DMD Circular Letter No. 05: Amendment of Guidelines and Operating Procedures of Islamic Banks Liquidity Facility (IBLF)
Bangladesh Bank amends the Guidelines and Operating Procedures of the Islamic Banks Liquidity Facility (IBLF) by replacing the definitions of Eligible Participants and the facility's features. Eligible participants are now defined as Shari'ah Based Banks and Islamic Branches or Windows of Conventional Banks maintaining Current or Al-Wadiah Accounts with Bangladesh Bank. The facility's tenor is set at 7, 14, and 28 days, with the profit rate determined by the respective bank's one-month MTDR rate or the next higher-term deposit rate if no one-month rate exists. These amendments apply to all Shari'ah Based Banks and Islamic Branches or Windows of Conventional Banks in Bangladesh and take effect immediately.
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.
- 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.
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Other instructions of the said Guidelines and Operating Procedures shall remain unchanged.
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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