Regulatory Alerts2013-03-17
Mourabaha Operations Conducted by Islamic Banks
The Central Bank of Djibouti issued Instruction 2012-02 to regulate Mourabaha transactions conducted by Islamic banks, mandating a binding purchase promise and defining key financial terms such as Hamech Al-jiddiya, non-restrictive investment accounts, and asset depreciation provisions. The regulation requires Islamic banks to apply mandatory purchase rules in sales contracts, ensure Mourabaha agreements explicitly detail rights, obligations, pricing, guarantees, and late-payment penalties, and limits asset holding periods to six months unless liquidated as directed. Furthermore, it establishes that Islamic banks remain subject to general credit institution regulations while granting them operational flexibility in investing client funds under Moudharaba or proxy contracts.