CHAPTER 2:
FRAMEWORK OF
ISLAMIC FINANCIAL
SYSTEM
Mohammad Salleh Abdul Saha
Razizi bin Tarmuji
razizi.uitm.edu.my
ْ َ‫م ُنوا ال ت‬
َّ ‫ها ال‬
ُّ‫يَا أَي‬
ُ
ً ‫ف‬
ُ
َ ‫اع‬
ْ َ‫الربا أ‬
َ ‫ض‬
َ ‫ض‬
ُ ً‫عافا‬
َ ‫م‬
َ
َ
َ
‫ة‬
‫وا‬
‫ل‬
‫ك‬
‫أ‬
‫آ‬
‫ين‬
‫ذ‬
ِ
ِ
ُ َّ ‫عل‬
َ ‫ح‬
َ َ‫اَّلل ل‬
ُ ‫م ُت ْف ِل‬
ْ ‫ك‬
َ َّ ‫َوات َّ ُقوا‬
‫ون‬
“Hai orang-orang yang beriman, janganlah
kamu memakan riba dengan berlipat ganda
dan bertakwalah kamu kepada Allah supaya
kamu mendapat keberuntungan”. (QS. Ali
‘Imran : 130).
ISLAM
AQIDAH
(Belief)
SHARIAH
AKHLAK
Muamalat
Ibadat
(man to man)
(man to Allah)
POLITICAL
ACTIVITIES
ECONOMIC
AVTIVITIES
SOCIAL
ACTIVITIES
BANKING & FINANCIAL
ACTIVITIES
DEFINITION OF ISLAMIC
BANKING
 A financial institution that operates with the
objectives to implement the economic and
financial principles of Islam in the banking
arena.
 Islamic Banking Act 1983:
“..a company which carries on Islamic
banking business means banking busines
whose aims and operation do not involve any
element which is not approved by the religion
of Islam…”
PAST
YEAR
Main
concern
2.1.1
Historical development
Of
Islamic Banking
HISTORICAL DEVELOPMENT OF ISLAMIC BANKING
In the world
1st stage: when
it still remained
an idea
2nd stage: it
already
became a
reality
In Malaysia
1st phase:
1963-1992
2nd phase:
1992-2000
3rd phase:
2001-2010
PAST
YEAR
In the world
1st stage: Interest-free banking as
an idea..
 Anwar
Qureshi (1946), Naiem Siddiqi (1948) and Mahmud
Ahmad (1952), followed by a more elaborate exposition by
Mawdudi in 1950, including all the writings of Muhammad
Hamidullah (1944, 1955, 1957 and 1962), have proposed a
banking system based on the basis of profit and loss sharing
(Mudharabah) rather than interest
2nd stage: Interest-free banks became
reality
1963
•As a result
from the
pioneerin
g efforts
of Ahmad
El-Najjar,
the first
Islamic
banking
was
establishe
d in Egypt
named
Mit
Ghamr
Local
Savings
Bank
1972
•First
commerci
al bank
(without
using
syariah) in
Egypt,
named
Nazir
Social
Banks
Nasser
Social
Bank was
establishe
d and its
objectives
are more
to social
than
commerci
al
1974
•The first
bank
explicitly
based on
Shariah
principles
was
established
by the
Organizatio
n of Islamic
countries
(OIC),
named
Islamic
Developme
nt Bank
(IDB) with
the mission
to provide
funding to
projects in
the
member
countries
1975-1979
• Several
Islamic
banks
came into
existence,
including:
• 1975Establishme
nt of first
Islamic
private
commercial
bank
named
Dubai
Islamic Bank
• 1977- Faisal
Islamic
bank of
Sudan,
Faisal
Islamic Bank
in Egypt
and Kuwait
Finance
House
• 1979Bahrain
Islamic
bank
1983-1984
•Iran and
Sudan
introduce
d 100%
islamic
banking
system
In Malaysia
1st phase : 1963-1992
1963
1969
1980
• Establishment of the Pilgrims Fund Board
• It is saving mechanism -Malaysian Muslim set aside regular funds
to cover them performing annual pilgrimage
• Pilgrims Fund Board combined with Pilgrim’s Management Fund
Board/ Lembaga Urusan dan Tabung Haji (LUTH)
• Several parties were calling for establishment of Islamic bank due
to resurgence that happened in the Middle East
• Eg: Malaysian government had being offered by Bumiputra
Economic Congress to set up Islamic Bank in this country
1981
1983
• Set up National Steering Committee (NSC), chaired by Raja
Mohar Badiozaman
• NSC undertake study and make recommendations to
government on all aspects relating Islamic Bank in Malaysia,
including legal, religious and operational aspects.
• LUTH take over the secretarial functions
• July 5: NSC submitted their report to government
• The first Islamic bank was established in Malaysia- Bank Islam
Malaysia Berhad (BIMB) under Islamic Banking Act 1983
Recommendation made by NSC on
Islamic Banking
Government should establish an Islamic Bank according to
Shariah
Bank should incorporated as a limited company under
Company Act 1965
New Islamic banking act (administered by BNM) must be
established to license and supervise Islamic Bank.
Each bank must has their own Shariah Supervisory Board to
supervise and ensure there is shariah operation in Islamic
bank
nd
2
phase : 1993-2000
1993
• 4 March: Interest-Free banking Scheme (IFSB)/
Skim Perbankan Tanpa Faedah (SPTF) was
launched on a pilot basis involving Malayan
Banking Bhd. , Bank Bumiputra Malaysia Berhad
and United Malayan Banking Corporation Bhd.
• July: Commercial banks, merchant banks and
finance companies begun to offer Islamic
banking products and services under the Islamic
Banking Scheme (IBS banks).
May
1997
•BNM establish Shariah Advisory Council (SAC) which
consist of academicians and Shariah experts in Islamic
Banking and Takaful
•Role:
•Harmonize different opinion in Shariah
•Advise BNM
•Analyze Shariah aspects of new products submitted by
banking institutions and takaful companies
• The IFSB/SPTF was replaced with
1st
Islamic Banking Scheme (IBS)/
December Sistem Perbankan Islam
1998
• Establishment 2nd Islamic Bank,
Bank Muamalat Malaysia Berhad (
1st October merger between Bank Bumiputera
1999
Malaysia Bhd. + Bank Commerce
(M) Berhad
3rd phase : 2001-2010
2001
• 1 March: BNM had launched Financial Sector Master
Plan (FSMP) – incorporated a comprehensive 10 year
master plan for Islamic banking and Takaful
• Declaration of Labuan as International Offshore
Financial Centre (IOFC) to promote Malaysia as
International financial system
2002
• Establishment of Islamic Financial Services Board (IFSB)
in Kuala Lumpur
2004
• Financial liberation of Islamic Banking sector with the
issuance of three new islamic license under IB Act
1983, from Middle East to Islamic financial institution
Today
• Implementing dual banking system
• Become the first nation have full-fledge Islamic system
operating side-by-side with conventional system
No.
Structured
Functions
1.
The Board of
Directors(BOD)
1. Set the banks policies and to monitor the
management’s faithfulness to them.
2. To plan the future and resolve current
problems.
3. To give advice, make judgment and
oversee the commitment of corporate
resources.
4. To assets, select and if necessary, replaces
the top management.
5. To define the responsibilities and limits of
authority of the managements.
2.
The Shariah Supervisory
Board.
1. To ensure all of the operation
compliance(obedience) to Shariah.
3.
The executive Committee
that comprise of a few
members of the Board of
directors who meet
frequently.
1. To dispose of matters which cannot wait for
the holding of the next BOD meeting.
No. Structured
Functions
4.
Management-CEO
1. Responsibilities and authorities to the
Departmental Head that report to him
especially monitoring their performance
and giving guidance.
2. Giving report to BOD through its Executive
Committee.
5.
Sub-committees:
Consists of various
department:
a) Customer Service
b) Credit and Marketing
c) Foreign Exchange
d) Treasury and Accounts
e) Administration
f) Systems where
computers are used
g) Internal audit
h) Organisation and
Research
i) Legal and Shariah
affairs.
The sections in the department:
a)
b)
c)
d)
deposit,cash,domestic bill,business developmnt
Mkt & credit analysis/administration/operation
Export,import,foreign bill & collection
Corporate acc,customer
acc,budget,treasury,central bank return.
e) Personnel,general services.
FEATURES
CONVENTIONAL
BANK
ISLAMIC BANK
Risk sharing
Predetermined rate of
interest
:Promotes risk sharing
between investor and the
bank & the bank and the
entrepreneur : preagreed proportion
Emphasis to product
Credit worthiness
Under PLS-return only if
there is a profit
-more concern with
soundness of the project
and managerial
competence of the
entrepreneur.
Moral Dimension
Little attention to the
moral implications of the
activities
All economic agents
have to work within the
Islamic moral value.
FEATURES
CONVENTIONAL
BANK
ISLAMIC BANK
Relationship between bank Creditor(bank) and
and customer
debtor(customer)
Partner. E.g:if based on almudharabah, the bank
become as a capital
provider and customer as
entrepreneur. They will
share profit based on ratio
agreed and losses in term
of money will bear by bank
capital provider(bank)
Shariah Supervisory Board
Don’t have shariah
advisory board. They
review solely by certified
auditors.
They have Shariah
supervisory board to ensure
and approve all of the
transaction and operation
based on shariah.
Zakat payment
Don’t pay zakat but only
pay tax as required by the
government
Pay zakat as a relegious
obligation and tax required
by the government
2.1.2
Takaful
Wakala model: The principalagent relationship
Mudaraba model: Partnership
Combination model: Principal-agent
relationship and partnership
TAKAFUL
Arabic word (‫)لتكافل‬-‘guaranteeing each other’ / ‘joint
guarantee’. It is an Islamic insurance concept which is
grounded in Islamic muamalat, observing the rules
and regulations of Islamic law
Basic concept
• Social solidarity
• Cooperation
• Mutual indemnification of losses among members
Principles
• Policyholders (Takaful partners) cooperate among
themselves for their common good. (wakalah)
• Every policyholder pays his subscription to help those who
need assistance (tabarru’)
• Losses are divided and liabilities spread according to the
community pooling system. (mudharabah)
• Uncertainty (gharar) is eliminated concerning subscription
and compensation.
• It does not derive advantage at the cost of others. (no
riba’)
History of Takaful in Malaysia
•The development of
takaful industry in
Malaysia was inspired
through the establishment
of Bank Islam Malaysia
Berhad (BIMB) in 1983
1983
1984
•The Takaful Act was
drafted
•29/11-Syarikat Takaful
Malaysia Berhad (Takaful
Malaysia)was established
as the pioneer takaful
operator in Malaysia
•Takaful Malaysia offering
Family Takaful & General
Takaful Business
1985
2006
2001
1997
1996
• 30th JulyThe
Company
was listed
on the
Main Board
of Bursa
Malaysia
• Ist May- BNM
established
NSAC on
Islamic
banking and
Takaful
• Acquisition
of Syarikat
Takaful
Indonesia
(STI), the
holding
company of
PT Asuransi
Takaful
Umum (ATU)
and PT
Asuransi
Takaful
Keluarga
(ATK)
• Augustthere is
HSBC
Amanah
Takaful in
Malaysia
2009 - 45 branches nationwide
with total assets over RM4.37
Billion at Group level
2010 - Launched Retail
Strategy: APF agency structure,
3-tier products (Takaful
myInvest, Takaful myGemilang,
Takaful myGraduan); Launched
Takaful myCare Centres
CRITERIA
INSURANCE
TAKAFUL
Elements of
Contains all these
Gharar(uncertainty) elements
,Maisir(gambling),
and riba’
Prohibited all of this
elements because
it’s contradict with
Shariah.
Shari’ah supervision
Objective is to
ensure that the
activities of
company are
carried out
according to
principles of Shari’ah.
Don’t have Shariah
Supervision
CRITERIA
TAKAFUL
INSURANCE
Accounts
the account known as AlTabarru’ which means
donation, the other one is
treated in line with the
principle of Al-Mudharabah.
The account is known as
general insurance account and
life insurance account of fund.
Bonus
Specifies from the outset how
the profits from .Takaful
investment are to be shared
between the
operator(mudharib) and the
participants(sahib ul-mal).
Based on principles of AlMudharabah, the ratio could
be 5:5 or 6:4 or 7:3 as agreed
between the participant and
the operator.
May offer bonus or profit in
general terms only especially
with profit policies, there is no
exact specification with regard
to the profit-sharing in contract.
It may also decide to give or
not to give bonus for any
particular year depending on
the result of the investment
return. The rate of bonus can
vary from year to year up to the
discretion of the Board of
Directors of the company.
CRITERIA
TAKAFUL
INSURANCE
Investment
The funds shall be invested
in any interest free from
Shari’ah justified scheme.
The entire procedure shall
comply the guidelines of
the Shari’ah investment
return must not be driven by
any unethical commercial
activities.
The funds may also be
invested in an interest-based
scheme. They can also be
invested in any scheme or
project, which may not be
supported by the Shari’ah
discipline.
Nature
The entire operation aims at
paying the way of
brotherhood, solidarity and
mutual cooperation.
The operation aims a
commercial gain on the
basis of the principles of
business.
CRITERIA
TAKAFUL
Regulations
Regulations affecting
Insurance law is based on
Takaful are based on the
the human thoughts and
Divine sanction (Qur’an and cultures
Hadith)
Contract
Participants own the Takaful
fund and managed by the
operator. Participants give
up individual rights to gain
collective rights over
contribution and benefits
INSURANCE
Insurance is a buy-sale
contract in which policies
are sold and the policy
holders are the purchasers.
A
global leader in Islamic Capital Market
 As at end of 2007
 Total Islamic Bond Market- US$37 billion
 134 Islamic Unit Trust Funds with a net
asset value of US$5.2 billion
 First Global Sukuk - Guthrie’s US$150
million in 2001
 First Global Sovereign Sukuk – Malaysian
Government’s US$600 million in 2002
ISLAMIC CAPITAL MARKET
YEAR
CRITICAL MILESTONES
1990:
SHELL MDS Sdn. Bhd. Issued the first Islamic bond.
1993
Launch of first Islamic Equity unit trust fund by
Arab-Malaysian Unit Trust Bhd
1994:
BIMB Securities Sdn. Bhd was established.
1995:
SC established ICM Unit.
1996:
•
•
1997:
The Sc introduced an official list of Syariah approved
securities traded on the KLSE.
1999:
The KLSE launched the country’s second Islamic equity index,
the KLSE Syariah index (KLSI)
The Syariah Advisory Council (SAC) was established.
RHB launched the country’s first Islamic equity index,
comprising shares of KLSE main board companies.
YEAR
CRITICAL MILESTONES
2000:
• The SC imposed the requirement to engage
independent Syariah adviser for issuing
Islamic Bonds, as stipulated in the Giudelines
on the Offering of Private Debt Securities.
• Islamic Bond Fund launched.
2001:
•The minister of Finance launched the Capital
Market Masterplan.
•2001: Issuance of the world’s first Global Sukuk
by Kumpulan Guthrie
2002:
• First Global Islamic Bond Issues.
• The Prime Minister launched the book,
resolutions of the Securities Commission SAC.
• 2002: Issuance of the world’s first Global
Sovereign Sukuk
2003:
The Malaysia Government, in its Federal Budget
2004, allowed tax deduction for 5 years on
expenses occurred in the issuance of Islamic
bonds, based on Syariah principles of Istisna’.
Islamic Capital Market
Statisitics as at 30 June 2012
Shariah-Compliant Securities on Bursa Malaysia
June 2012
June 2011
No. of Shariah-compliant securities+
825
847
% to total listed securities
89%
89%
864
836
Total market (RM billion)
1,368
1,342
% of Shariah-compliant securities to total market
63%
62%
Latest market capitalisation:
Shariah-compliant (RM billion)
Islamic Capital Market products and services
versus conventional market
Conventional
Money Market
Instruments
Fixed income bonds
Equities
Islamic
Commodity Murabaha
Unit Trust/Mutual Funds
Real Estate through
Investment Funds (unrestricted leverage )
Stock broking
Same as conventional
Real Estate with Shariah
acceptable leverage
Sukuk
Shariah compatible
equities
Islamically acceptable
broking
STRATEGIC INITIATIVES TAKEN BY SC TO MEET
THE OBJECTIVES OF ESTABLISHING MALAYSIA
AS INTERNATIONAL ISLAMIC CAPITAL MARKET
CENTER
Facilitate the development of various competitive products and services
related to the Islamic Capital Market (ICM)
 Created an independent market mobilize Islamic funds effectively.
 Enhance the value recognition of Malaysia ICM internationally.
 To ensure and maintain public confidence in the ICM by ensuring the
range of product and services offered by market participants are in full
compliance with Syariah principles.
 To review and provide guidance on all matters related to ICM to ensure
conformity with Syariah principles.
 to advices SC on all matters related to the comprehensive development
of the ICM and function as a reference for issue related to ICM

THE ROLE OF SHARIAH
ADVISORY COUNCIL (SAC) OF SC

established by the SC in 1996 under section 18 of the Securities
Commission Act 1993 (SCA)
To ensure harmonization and standardization of Syariah rulings to
avoid possible divergence of Syariah scholars in the country.
 Method that used by the SAC to introduced the ICM instruments.
* To study the validity of conventional instruments
used by the local capital market from the Syariah
perspective.
* Formulating and developing new financial instruments
based on Syariah principles.

SHARIAH- COMPLIANT SECURITIES
BY THE SHARIAH ADVISORY (SAC)
OF THE SUCURITIES COMMISSIONS
(SC)
In classifying securities which are listed on Bursa
Malaysia, SAC received input and support from the
SC.
 The SC gathered information on the companies
from various sources.
 The SC, through the SAC, continue to monitor the
activities of all companies listed on Bursa Malaysia
to determine their status from the Shariah
perspective.

NON- COMPLIANT SECURITIES


a)
b)
c)
The SAC has applied a standard
criterion in focusing on the activities of
the companies listed on Bursa
Malaysia.
The companies that considered under noncompliant securities if they are involved in the
following core activities:
Financial based on riba(interest).
Gambling and gaming.
Manufacture or sale of non- halal products.
d) Conventional insurance that containing
element of gharar(uncertainty).
e) Entertainment activities that are nonpermissible according to Shariah.
f) Manufacture or sale of tobacco-based product
or related products.
g) Stockbroking or share trading in Shariah noncompliant securities.
h) Other activities deemed non- permissible
according to Shariah.
CAPITAL MARKET PRODUCT
Call warrants.
* Underlying Assets
* Exercise Price
* Exercise Period
2)
Transferable Subscription Rights (TSR).
3)
Crude Palm Oil Future Contract.
* Among the related issues to this instrument
are gambling, gharar, bai’ ma’dum and ‘iwadh.
4) Composite Index Future Contract.
1)
ISLAMIC INTERBANK MONEY
MARKET
(IIMM)
INTRODUCTION
THE ISLAMIC MONEY MARKET IS INTEGRAL TO THE
FUNCTIONING OF THE ISLAMIC BANKING SYSTEM.
 PROVIDE THE ISLAMIC FINANCIAL INSTITUTIONS WITH
THE FACILITY FOR FUNDING AND ADJUSTING PORTFOLIOS
OVER THE SHORT-TERM AND SERVING AS A CHANNEL FOR
THE TRANSMISSION OF MONETARY POLICY.
 FINANCIAL INSTRUMENT AND INTERBANK INVESTMENT
WOULD ALLOW SURPLUS BANKS CHANNEL FUNDS TO
DEFICIT BANKS, ALSO MANTAINING THE FUNDING AND
LIQUIDITY MECHANISM NECESSARY TO PROMOTE
STABILITY IN THE SYSTEM.

IIMM WAS INTRODCED ON JANUARY 3, 1994 AS A SHORT-TERM
INTERMEDIARY TO PROVIDE A READY SOURCE OF SHORT-TERM
INVESTMENT OUTLETS BASED ON SYARIAH PRINCIPLE.
 THE ISLAMIC BANKS AND BANKS PARTICIPATING IN THE
ISLAMIC BANKING SCHEME (IBS) WOULD BE ABLE TO MATCH
THE FUNDING REQUIREMENTS EFFECTIVELY AND EFFICIENTLY.
 BANK NEGARA MALAYSIA (BNM) ISSUED THE GUIDELINES TO
FACILITATE PROPER IMPLEMENTATION OF THE IIMM.

DEVELOPMENT OF BNM OPERATIONS IN
MALAYSIAN ISLAMIC INTER BANK MONEY
MARKET
18 DEC 1993: ISSUE THE GUIDELINES ON THE IIMM.
 03 JAN 1994: IIMM WAS INTRODUCED.
 13 FEB 1996: MUDHARABAH INTERBANK INVESTMENT.
 21 SEP 1999: MUDHARABAH MONEY MARKET TENDER.
 29 NOV 2000: BANK NEGARA NEGOTIABLE NOTES- BASED ON BAI
AL- INAH.
 15 JUN 2001: GOVERNMENT INVESTMENT ISSUE BASED ON BAI ALINAH AND ISSUE ON BEHALF OF THE GOVERNMENT MALAYSIA.
 01 OCT 2OO1: CIRCULAR ON WHEN ISSUE WAS ISSUED BY BNM TO
ALL THE ISLAMIC BANKING INSTITUTIONS.
 15 APR 2002: WADIAH ACCEPTANCE BASED ON AL WADIAH.

01 AUG 2002: BNM ISSUED GUIDANCE NOTES ON SELL AND BUY BACK
AGREEMENT TO ISLAMIC BANKING INSTITUTIONS.
 21 DEC 2002: SELL AND BUY BACK TENDER VIA FULLY AUTOMATED
SYSTEM OF ISSUING/ TENDERING SYSTEM (FAST) WAS INTRODUCED.
 17 SEPT 2004: ISSUANCE OF THE FIRST MALAYSIAN ISLAMIC TREASURY
BILLS.
 08 OCT 2004: LAUNCHING OF ISLAMIC INTERBANK MONEY MARKET
WEBSITE BY THE GOVERNMENT.
 16 FEB 2006: INAUGURAL ISSUANCE OF SUKUK IJARAH BANK NEGARA
MALAYSIA.

 08
Feb 2007 Introduced Commodity Murabahah
Programme (CMP).

21 Apr 2009 The Association of Islamic Banking Institutions
Malaysia (AIBIM), have unanimously adopted two
standardized interbank master agreements for Islamic deposittaking and placement transactions.

02 Jul 2009 Inaugural issuance of Bank Negara Monetary
Notes Murabahah (BNMN-Murabahah).

17 Aug 2009 Bursa Malaysia – launched Bursa Suq Al Sila – a
world’s first, end-to-end Shariah-compliant commodity trading
platform that is able to facilitate commodity-based Islamic
financing and investment transactions under the Shariah
principles of Murabahah, Tawarruq and Musawwamah using
Malaysia's commodity, crude palm oil (CPO).

21 Aug 2009 The Corporate Murabahah Master Agreement
(CMMA), a standard document for deposit taking between
financial institutions and corporate customers, was launched
by Association of Islamic Banking Institutions Malaysia (AIBIM).

17 Sep 2009 Association of Islamic Banking Institutions
Malaysia – launched two standardized documents for
deposit taking and placement transactions. The move
significantly enhanced Islamic interbank activities by
improving efficiency, limit misunderstandings and reducing
the cost of Islamic banking transactions.

24 Nov 2009 The Association of Islamic Banking Institutions
Malaysia (AIBIM) has launched the standard Wakalah
Placement Agreement (WPA). The move is aimed at
standardising the agreement for deposit placements by
corporate customers with Islamic financial institutions (IFIs)
and for interbank placements among IFIs under the
Wakalah concept.
TYPES OF INSTRUMENT OF IIMM
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
MUDARABAH INTER-BANK INVESTMENT (MII).
WADIAH INTERBANK-BANK ACCEPTANCE.
GOVERNMENT INVESTMENT ISSUES (GII).
BANK NEGARA MONETARY NOTES- i (BNMN-i).
SELL AND BUY BACK AGREEMENT (SBBA).
CAGAMAS MUDHARABAH BONDS (SMC)
WHEN ISSUES (WI).
ISLAMIC ACCEPTED BILLS (IAB)
ISLAMIC NEGOTIABLE INSTRUMENTS
ISLAMIC PRIVATE DEBT SECURITIES
AR RAHNU AGREEMENT-I (RA-i)
SUKUK IJARAH BANK NEGARA MALAYSIA (SBNMI).
PAST
YEAR
ISLAMIC INTER- BANK MONEY
MARKET
ISLAMIC CAPITAL MARKET
Short- term investment (< 1 year)
Long- term investment (> 1 year)
No organized exchange only
cover the counter (OTC) trading.
Malaysia.
DIFFERENCES –Organized
ICM vs
IIMM
exchange
of Bursa
Governed and supervised by the
BNM.
Governed and supervised by SC.
The IIMM covers inter-bank
transaction as the following:
1) Inter- bank trading in Islamic
Financial instruments.
2) Islamic inter-bank investment.
3) Islamic inter-bank cheque
clearing system.
ICM between both retail
(individual) and institutional
investors with corporations.