Words of Wisdom - the Editor

Peace.
Got busy with a new project. So couldn’t add more news. Although I came across a fine article by a brother on the history and future of Islamic Banking. I was surprised to know that Islamic banking had beginnings in 1975. Wow. That’s almost as early as my birth. And I guess if there are enough like minded people any idea is bound to grow. I too used to wonder if I can invest without plunging into interest based transactions.

UK I noticed is taking some fine initiatives to promote Shariah Finance. Also came across a western brother or atleast who calls Muslims his brothers and sisters but laughs cynically at the DOW Islamic index as 'bending backwards' to accommodate those guys who have four wives and cut of peoples hands. O well some people just don't get it, do they?

Tuesday, October 14, 2008

CIMB Islamic offers Shariah-compliant forex option

KUALA LUMPUR: CIMB Islamic Bank Bhd recently launched its Islamic foreign exchange with Shariah-compliant option features or FXOP-i, which allowed customers to hedge their forex risk.

CIMB Islamic said on Monday FXOP-i enabled customer to lock in a forex rate in advance by engaging in a Shariah-compliant financial transaction with CIMB Islamic.

It added net proceeds from this transaction -- similar to the premium paid for option instruments in conventional finance -- granted customers the right, but not the obligation, to exercise the option at the agreed rate on the maturity date.

CIMB Islamic CEO Badlisyah Abdul Ghani said with this product, customers could protect the value of their future foreign currency proceeds and also fix their hedging cost at the equivalent of the option "premium".

He said the customers could even earn a profit if the forex rates moved in their favour and with assurance that the transaction adhered to Islamic principles.
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