• IBANK Division 6.4.B IBANK Division 6.4.B Inventory Risk

    • IBANK 6.4.7 Relation to Market Risk

      In measuring its market risk, an Islamic banking business firm must include the risk of holding assets in inventory with a view to reselling them under a murabahah contract or for leasing them under an ijarah contract (inventory risk).

      Derived from QFCRA RM/2015-2 (as from 1st January 2016).

    • IBANK 6.4.8 Measuring Inventory Risk

      (1) An Islamic banking business firm must use the simplified approach to measure inventory risk.
      (2) The capital charge for inventory risk of an Islamic banking business firm is 15% of the value of the assets held by the firm in inventory with a view to resale or lease.

      Note For capital charges for inventory risk that may arise for work-in-process under istisna contracts, see rule 6.7.5 and rule 6.7.6.
      Derived from QFCRA RM/2015-2 (as from 1st January 2016).