Collateralised murabahah
A murabaha placement secured by collateral such as sukuk, used as an Islamic alternative to a repo.
Collateralised murabahah is a commodity murabaha in which the deferred payment obligation is secured by collateral, typically sukuk, pledged by the party receiving the funds. It gives Islamic institutions a secured funding tool comparable in purpose to a repurchase agreement, while the collateral remains a pledge rather than a sale and buy-back. IIFM publishes a Master Collateralized Murabahah Agreement for these transactions.
Sources
This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.
Related terms
Commodity murabahaInterbank and treasury deals in which commodities are bought and sold on deferred payment to place or raise short-term funds.RahnA pledge: an asset held as collateral for a debt, which can be sold to repay it if the debtor defaults.Short-term liquidity sukukShort-term, tradable sukuk that Islamic banks hold as liquid assets and use to manage cash, including across borders.