BANKS URGED TO USE BURSA SUQ AL-SILA` TO ENABLE FLOW OF FUNDS

KUALA LUMPUR, Jan 25 (Bernama) -- Malaysia's central bank Bank Negara
Malaysia (BNM) has urged banks in Malaysia and Bahrain to work together and use
Bursa Suq Al-Sila' to enable the flow of funds that would enhance the liquidity
management framework between both countries.

BNM deputy governor, Mohd Razif Abd Kadir, said Bursa Suq Al-Sila' could
provide a viable alternative to the well-functioning of liquidity management in
Islamic financial system.

Bursa Suq Al Sila' is a purposefully-designed exchange-traded platform to
facilitate commodity murabahah transactions.

It is the first Internet-based platform in the world with crude palm oil as
its underlying base commodity.

"The platform will provide another dimension to the liquidity management
infrastructure of the Islamic banking industry, thus providing market players
with greater tools to manage their assets and liabilities," he said at the
signing of a memorandum of understanding between Malaysia's stock exchange Bursa
Malaysia and Bahrain Financial Exchange in Bahrain Sunday.

The text of his speech was made available here Monday.

Mohd Razif said the platform would create a more transparent and streamlined
commodity transaction practices based on the concept of murabahah or tawarruq.

He said it would also be able to eliminate uncertainty in the transactions
and could mitigate risks such as legal risk, market risk and counter-party risk.

"As Bursa Suq Al-Sila' is designed to be a multi-currency platform it can
enhance liquidity and risk management capacity of the international Islamic
banking community," he said.

Mohd Razif said the platform could be harnessed into a cost-effective global
platform to develop universally-acceptable Islamic financial products for the
financial and capital market.
-- BERNAMA