Scenario of Islamic money market instruments in some selected Muslim countries: A lesson for Bangladesh

Abstract

The main focus of this study is to investigate the incumbent scenario of Islamic money market instruments in and outside of Bangladesh along with the close observation of conventional one. Islamic money market in different jurisdictions has deeply been observed and studied in this paper. From the experiences of global situation, Bangladesh money market has been found at a nascent stage. Some recommendations and proposals have been suggested to set up and formulate a vibrant, robust, healthy and sustainable Islamic money market for effective competition. Having an abundant potentiality of Islamic money market among, especially, in Muslim countries, this paper invokes respective central banks, Islamic financial institutions and non-bank Islamic financial institutions to come forward to operate and practice Shariah based money market in a unique way or along with conventional money market. Bank Negara Negotiable Notes, Islamic Accepted Bills (IAB), Islamic Negotiable Instruments of Deposit (INID), Rahn Agreement are found suitable for Bangladesh money market and two new instruments called Central Bank Mudarabah Sukuk (CMBS) and Government Murabahah Sukuk (GMS) have been proposed for the country.