Republic of Maldives’ Ministry of finance and treasury issues Wakalah papers (By IFN)

Republic of Maldives’ Ministry of finance and treasury issues Wakalah papers

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MALDIVES: A source from the Capital Market Development Authority of the Maldives (CMDA) told Islamic Finance news that the government has issued MVR150 million (US$9.75 million) in Wakalah bi Istithmar papers to facilitate Shariah compliant liquidity management for the country’s only Islamic bank, Maldives Islamic Bank. The bank is majority-owned by the Islamic Corporation for the Development of the Private Sector (ICD), with an 85% stake, while the remaining 15% is owned by the Government of the Maldives. According to the source at the CMDA, proceeds from the transaction will be used towards the oil trading activities of the Fuel Supplies Maldives— a subsidiary of the government-owned State Trading Organization. The issuance, which is split into three tranches, has a maturity of six months per tranche. The facility was structured by the Maldives Monetary Authority, the Central Bank of Maldives, and advised by Aishath Muneeza, a registered Shariah Adviser at the Securities Commission of Malaysia. At the signing ceremony the republic’s minister of finance and treasury, Abdulla Jihad, encouraged the facilitation of more Shariah compliant instruments within the market to encourage the growth of Islamic banking in the country. Commenting on the deal, a market source said: “Although the population of the Maldives is 100% Muslim, up until now there have been no Islamic finance instruments in the country issued specifically to deal with the liquidity management issues of the only Islamic bank operating in the country. This is definitely a step in the right direction for the government and the country’s Islamic banking sector.”