Islamic and Conventional Short Term in Malaysia : Treasury Bill
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.
Issuer
• 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
Definition
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
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.
Issuer
• 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
Definition
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