ISLAMIC INTERBANK MONEY MARKET IN BANGLADESH : A LITERATURE REVIEW

Different money market is imperative in efficient and effective operations of Islamic finance operations in Bangladesh and proper implementation of Islamic Shariah. But since inception,Islamic financial institutions operate here without having separate money market. Recently, Bangladesh Bank plan to establish Islamic Interbank Money market (IIMM) for Islamic financial institutions to facilitate Islamic finance at a great pace. On this purpose, they modify the existing “Islamic Investment Bond Rules-2004”. They want to create a new avenue for trading of the Islamic Bond in the near future through amending its rules. Islamic Bond will be transformed into an auctionable instrument among the Islamic banks to be of assistance in managing their liquidity in line with Islamic Shariah. This step is being treated as a pragmatic step because, Islamic finance and banking is growing at a large scale in the economy of Bangladesh and from the speech of specialists in this arena, this financial sector will dominate in the world economy in future. So in the era of globalization Bangladesh have to keep in line with this trend. Like establishing guidelines for operating Islamic financial activities, this step is being treated as the continuous support of central bank towards the establishment of Islamic finance in the soil of Bangladesh. This paper contains a literature review research of Islamic Bond, which is connoted as Sukuk and Islamic Interbank Money Market. The purpose of this literature review research is to set up a theoretical framework in regard to establish Islamic Interbank Money Market in Bangladesh.