Islamic finance is a full-fledged financial system, including well-established banking, capital markets, money markets and insurance products and practices. Islamic finance is governed by principles of Shari’ah, which in practice provides an alternative or complementary ethical investment approach promoting risk and reward sharing, social justice and the benefit to wider society, profit generation from legitimate assets and investments, and seeks to avoid uncertainty and speculation.
The Islamic finance industry, much like the broader finance market, has spent much of the past three years weathering the global economic turmoil and market volatility, which has affected Islamic finance institutions’ liquidity and has proven the importance of the ability to access short-term funding on a secure, low-cost and low-risk basis. A Shari’ah-compliant repurchase transaction, a Repo, provides efficient access to short-term funding, as well as giving Islamic financial institutions and corporates the ability to utilize their sukuk portfolios and other Shari’ah-compliant instruments in their liquidity management operations.
The full article is available at https://www.whitecase.com/insight-our-thinking/repos-islamic-finance