By Mohd. Ma’sum Billah
Abstract
When
Bank Negara Malaysia set out to introduce the Sale and Buy Back Agreement
(SBBA) in Islamic banking in Malaysia in the early 1980s, a revised version of
which was effective from 15 August 2002, it had in mind a two-phased approach.
In the first phase, the bank wanted to ensure that the Islamic banking system
contained all the three important components of a viable banking system, namely
a large number of Islamic financial instruments to meet the various needs of
the Muslim business community, a large number of financial institutions
providing Islamic financing facilities and an Islamic inter bank money market.
The Islamic inter bank money market, by linking the institutions and the
instruments, was expected to provide depth to the Islamic financial system.
