IIBFM idlying for 1.5 months

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FE Report There has been no transaction in Islamic Inter-bank Fund Market (IIBFM) for nearly one and a half months in the absence of demand for liquidity, sources said. The IIBFM started functioning six months ago Demand of investment is lower in country due to weak infrastructure as well as shortages of gas and power, Mohammad Abdul Mannan, Managing Director of Islami bank BD, told the FE on Monday. Islamic banking sector's fund management has been improving day by day. For this islami banks need not seek IIBFM liquidity, he added. "We all Islami banks are passing better days in respect of our overall liquidity position. As a result, placement of fund is going on but demand for money is nil," a high official of a islami bank said. Besides, recently the credit-deposit ratio of all Islami banks has gone down, for providing loans to smaller number of clients, he added. There were no transactions after December 24, 2012 to February 04, 2013, according to BB data. Statistics said Islami Bank Bangladesh and EXIM Bank had mainly placed the fund in the money market after the inception of the IIBFM. The Islami Bank BD and Exim bank placed Tk 1 billion and Tk 1 billion respectively in October last year. First security Islami bank and Shahjalal islami bank Ltd. (SJIBL) Borrowed money in October. In 11 days of November, Islami Bank placed Tk. 1 billion to Tk 2.50 billion. The SJIBL borrowed Tk. 10.50 billion from the placement. Besides, the Islami Bank BD placed Tk. 2.5 billion from December 11 to December 24, 2012 from the placement fund. The Jamuna Bank took Tk. 500 million, and the SJIBL took Tk. 18.80 billion in nine days, showed BB data. The BB on June 3, 2012 launched the IIBFM, a separate call money market for Islami banking, in a bid to reduce liquidity pressure and ensure better liquidity management in the Islami banks. The BB official said that the number of transactions at the money market significantly declined in January and dealing among the Islami banks had virtually stopped since December 25, 2013. The new call money market--IIBFM--is being run by sharia-based banks in the country. Transactions are based on profit, instead of interest.