Bank Sarasin & Co has selected Avaloq's Islamic Banking Solution, in an effort to upgrade its range of Sharia-compliant offerings to private clients.
The new system covers a range of Islamic products, such as murabaha finance and placement, diminishing musharaka, and others. Murabaha refers to a form of fixed-income commodities trading, where parties agree on an upfront price pre-sale, and the seller takes physical receipt of the commodity before passing it on.
Islamic finance has strict rules regarding riba, or interest, which is forbidden under religious law collectively referred to as Sharia. Most transactions, in contrast to capital markets trading in the US and other Western regions, also involve having tangible assets in possession, and include a culture of risk sharing between counterparties.
"Islamic banking is one of the fastest growing segments of the worldwide financial industry, extending across the Middle East, South East Asia, Africa and Europe," says Francisco Fernandez, CEO at Avaloq. "Our Islamic Banking Solution addresses that trend in an efficient and integrated way."