Dhaka, Bangladesh (BBN) – The central bank of Bangladesh on Tuesday introduced a call money market — Islami Inter-bank Fund Market (IIFM) — for the shariah-based banks and financial institutions (FIs) and Islamic banking branches of commercial banks.

The IIFM where shariah-based banks and FIs and branches of other banks would lend or borrow money among them for one-day, would facilitate strengthening of liquidity management of the banks, a Bangladesh Bank (BB) circular said on Tuesday.

The circular also said that the banks, FIs and Islamic branches of commercial banks could handover their excess funds to Islami Bond Fund (IBF) on daily basis. The Islami Bond Fund would take the fund as custodian. Any Islamic bank requiring fund will borrow the money from the IBF.

“The IBF will facilitate the fund transfer from banks having excess liquidity to the ones having deficit under Islamic Shariah,” a BB official said, adding that the deal would be based on Mudaraba principle of Islamic banking law.

BBN/SSR/AD-28Dec11-1:01 am (BST)