Short-term Sharīʿah-compliant Islamic liquidity management instruments to sustain Islamic banking: The case of Maldives

Abstract

Purpose

The purpose of this paper is to describe the structure of the Islamic treasury bills issued by the Central Bank of Maldives, Maldives Monetary Authority (MMA) for the benefit of those jurisdictions that aspire to introduce short term Islamic liquidity management instruments.

Design/methodology/approach

This is exploratory research where the experience of the author in structuring the Islamic liquidity management instruments discussed in the paper.

Findings

It is evident from the discussions of this paper that innovation is the key to structure Sharīʿah-compliant short term liquidity management instruments. The example of Maldives has proved that there is a need to amend the laws of the country to facilitate Central banks to deal with Sharīʿah-compliant instruments.

Originality/value

It is hoped that this research has shed light on the importance of having the proper Sharīʿah-compliant liquidity management instruments for sustainable development of Islamic banking and how jurisdictions have practically made this possible. The Islamic money market has developed gradually and there is a need to innovate novel and competitive instruments and further research is required to be conducted on this.

Citation

Muneeza, A. (2020), "Short-term Sharīʿah-compliant Islamic liquidity management instruments to sustain Islamic banking: The case of Maldives", Journal of Islamic Accounting and Business Research, Vol. 11 No. 2, pp. 428-439. https://doi.org/10.1108/JIABR-04-2018-0055