One of the chief concerns about Shariah-Compliant Finance is the lack of liquidity born of the ban on interest.

The industry has sought to address this problem with convoluted instruments which are largely unproven. And they won’t be proven until they endure a financial crisis of some sort. In the last financial crisis the instrument of choice in Shariah finance, sukuk (Shariah-Compliant Bonds) didn’t fare so well. In fact there was a rash of defaults.

Now there are hold ups in the implementation of the Shariah liquidity instruments in one relatively new frontier for Shariah finance: Oman.

That country’s central bank has put a hold on those instruments at least until they issue a sovereign sukukā€¦

http://www.reuters.com/article/2014/03/12/oman-islamic-banks-idUSL6N0M937Y20140312

 

 

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