KHCB signs Sukuk Murabaha agreement with BHB

By Edil Corneille

Khaleeji Commercial Bank (KHCB), an Islamic bank in the Kingdom of Bahrain, has recently signed an agreement with Bahrain Bourse (BHB), allowing the bank to utilise the Ijara Sukuk issued by the Central Bank of Bahrain (CBB) as underlying assets to complete Murabaha Finances; a new Shari’a-compliant brokerage service introduced by the Bourse through its electronic platform in replacement of Commodity Murabaha.

As per the agreement, KHCB will be able to benefit from this service by expanding the bank’s asset management and introducing diversified financial solutions that serve various fields. This new service will also reduce the time needed to complete transactions that are related to Murabaha Financing, as the purchasing and selling process is done through BHB as a Local Broker and through an advanced electronic platform.

On this occasion, KHCB CEO Sattam Sulaiman Algosaibi stated, “This agreement comes as a new addition to the process of developing the banking services offered by the Bank. It also serves the reinforcement of our leading products and services, which we have begun to formulate a supportive digital infrastructure in line with the Bank’s new strategy.”

Algosaibi added, “The Sukuk Murabaha service with BHB will meet the growing demand for Shari’a-compliant financing solutions. This will contribute to the improvement of services provided to our valuable clients, in addition to cementing the distinguished position of the Kingdom of Bahrain as a leading financial hub for Islamic banking. We value the sincere efforts exerted by the CBB and BHB to develop this sector through the introduction of such leading initiatives.”

BHB CEO Shaikh Khalifa bin Ebrahim Al Khalifa commented, “We are delighted to have KHCB on board with us in this initiative. The new Murabaha service through Ijara Sukuk is considered one of many innovative and Shari’a-compliant solutions that aim to meet banks’ increasing demand, as well as allow participating financial institutions to offer Shari’a-compliant Murabaha services to its clients.”