CIMB Islamic Bank Berhad and PETRONAS have signed an inaugural Tahawwut Master Agreement for Shariah Compliant Commodity Derivatives which marks the national oil and gas being the first corporation in Malaysia to utilise the bank’s Islamic Shariah-compliant commodity hedging instruments for Islamic Energy Commodity Derivative trades.
The TMA is a multiproduct framework agreement drafted by International Swaps Derivatives Association in collaboration with International Islamic Financial Market Association to govern Shariah-compliant derivative transactions. The TMA provides the market with globally accepted and standardised terms for Islamic hedging products, which will spur the growth of Islamic hedging products in the international market.
Chief Executive Officer of CIMB Islamic Ahmad Shahriman said, “CIMB Islamic is proud to partner PETRONAS for this landmark Shariah- compliant commodity derivatives arrangement, contributing towards the development of Malaysia’s International Islamic Financial Centre, in line with Bank Negara Malaysia’s Financial Sector Blueprint.”
The banking group said the adoption of a global acceptable master agreement bodes well with the development of Malaysia as an international marketplace for Islamic finance and in line with the its Forward23+ strategic plan.
