Repos in Islamic Finance – 2

In our article titled “Repos in Islamic Finance”1 we concluded that Shari’ah-compliant repurchase transactions (“Repos“) could play a useful role as a liquidity management instrument to assist with the short-term liquidity shortages in the Islamic finance industry. For the industry as a whole, a standard template for documenting a Shari’ah compliant Repo would be a useful starting point for all Islamic banks who wish to use the technique.