Bank Islam signs first Islamic rate swap deal with StanChart

The deal is the Islamic equivalent of an interest-rate swap, and is called a wiqa' (value protection) forward rate agreement. Bank Islam will swap a fixed profit rate payment, due every six months, with a rate payment from Standard Chartered linked to the Kuala Lumpur interbank offering rate. The underlying notional was commodities listed on the London Metals Exchange, the banks said.

Standard Chartered designed and proposed the deal to Bank Islam, and will offer it to corporate customers that are receiving fixed-rate payments, or making floating-rate payments and expect the floating rate to rise.

Bank Islam's managing director, Zukri Samat, said the deal allowed Bank Islam to minimise its exposure to fixed-rate payments by swapping them for floating rate payments.

The Malaysian investment bank CIMB announced the launch of an Islamic rate swap in June last year, but so far no deals have been made public.

  • LinkedIn  
  • Save this article
  • Print this page  

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: