AFGHANISTAN: Amping up its trade finance and commodity Murabahah offerings, the Islamic Bank of Afghanistan has joined the Dubai Multi Commodities Centre (DMCC) Tradeflow platform, enabling the bank to take multicurrency trades from across the globe and conduct Tawarruq transactions for liquidity management purposes.
“This will enable us to offer a broader range of Shariah-compliant financial products and services, and reach the unbanked customers within our country,” commented Amer Khalil Ur Rehman, CEO and the president of the Islamic Bank of Afghanistan, which last April has become the first fully-fledged Islamic bank operating in the country following a three-year conversion period.
The DMCC Tradeflow platform, an online platform for registering possession and ownership of commodities stored in UAE-based storage facilities, enables banks, financiers and suppliers to manage and mitigate potential risks across the commodity value chain.
In the first four months of the year, more than 30 financial institutions utilized the DMCC Tradeflow platform to trade commodities in a Shariah compliant manner across three continents with transactions amounting to AED25.5 billion (US$6.94 billion). More than 26,000 transactions were registered in the first quarter of the year.
“Our partnership will facilitate the bank’s Murabahah transactions to develop a wide range of new Islamic financial solutions, through the platform’s robust regulatory framework, unparalleled security and an active trading base for commodity title transfers,” shared Sanjeev Dutta, the executive director of commodities at the DMCC.
Joining the DMCC Tradeflow platform is also an opportunity for the Islamic Bank of Afghanistan to tap the electronic commodity Murabahah trading platform for Islamic interbank transactions launched back in 2013. Noor Bank and Commercial Bank of Dubai were the first financial institutions to use this liquidity management tool with a AED50 million (US$13.61 million) commodity Murabahah deal.