Islamic and Conventional Short Term in Malaysia : Treasury Bill

Topics: Finance, Balance sheet, Bond Pages: 2 (396 words) Published: October 14, 2010
Islamic and Conventional Short Term in Malaysia
Treasury Bills
MITB are short-term securities issued by the Government of Malaysia based on Islamic principles. •MITB are structured based on Bai’ Al Inah principle whereby BNM, on behalf of the Government of Malaysia, to sell an asset to the successful participants on cash basis and subsequently will buy back the same asset at par based on credit term. •Denominated in multiples of RM100,000-00.

The Government of Malaysia.

Syariah compliance or not
The instruments are issued using Islamic principles which are deemed acceptable to Shariah requirement

Requirement to enter or buy
Treasury regularly sells bills with maturities of three months (13 weeks), six months (26 weeks), and one year (52 weeks). All bills are sold at discount so that the return to the investor is the difference between the purchase price of the bill and its face or par value.

Profit earned yearly
Not stated

Tenure of investment
One year

Initial investment
A small initial investment can achieve growth over time.

Method to withdraw or selling the investment and minimum balance to be put •The minimum amount that you can purchase of any given Treasury bills is $1,000. Additional amounts must be in multiples of $1,000. Commercial paper

An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories and meeting short-term liabilities. Maturities on commercial paper rarely range any longer than 270 days. The debt is usually issued at a discount, reflecting prevailing market interest rates.

Who is the issuer
Issuers of commercial paper usually are financial companies that have frequent and sizable borrowing needs and find it more economical to sell paper without the use of an intermediary. Syariah compliance or not

Not stated

Requirement to enter or buy
Buyers of commercial paper generally buy the terms that...
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