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Interbank Investment Account (Wakalah) (IIA Wakalah)

Definition Interbank Wakalah : Interbank Wakalah is a wholesale money market transaction designed as liquidity management instruments in the Islamic Money Market. Based on a contract of Wakalah (Agency) with the objective of making a profit, its features are all but not limited to the following:

  • The actual return is known only on the maturity date
  • Fixed maturity period
  • Known risk profile
  • Principal is not guaranteed

Investment Account :

An account under which money is paid and accepted for the purposes of investment, including for the provision of finance, in accordance with Shariah on terms that there is no express or implied obligation to repay the money in full and

a) either only the profits, or both the profits of losses, thereon shall be shared between the person paying the money and the person accepting the money; or

b) with or without any return.
Unrestricted Investment Account :

A type of investment account where the investor authorize the Bank to invest their funds in Shariah compliant assets without specifying any restrictions or conditions on the management of the funds.

Applicable Shariah concept Wakalah bil istithmar
An investment agency contract in which the capital provider (muwakkil) mandates his agent (wakil) to perform particular mua’malah transaction or investment and in return the agent will receive a fee (ujr) for the service.
Features Interbank Wakalah is where the surplus bank appoints the deficit bank as its agent to invest the funds in the deficit bank’s banking activities with the intention of making a profit. Both parties will then negotiate and agree on the amount, tenor of investment and the expected rate of return. The accepting bank will not guarantee the investor’s principal amount on the investment activities. Profit is paid on the maturity date based on the actual return of the accepting bank.
Types of Interbank Wakalah There are four types of Interbank Wakalah:

  • Wakalah Interbank Placement (WIP)

WIP refers to the Bank investment on the basis of Wakalah to another participating bank.

  • Wakalah Interbank Acceptance (WIA)

WIA refers to the Bank accepting investment on the basis of.

Wakalah from another participating bank.

  • Foreign Wakalah Interbank Placement (FWIP)

FWII/FWIP refers to the Bank investment in foreign currency on the basis of Wakalah to another participating bank.

  • Foreign Wakalah Interbank Acceptance (FWIA)

FWID/FWIA refers to the Bank accepting foreign currency investment on the basis of Wakalah from another participating bank.

Profit Rate Rate of return for Interbank Wakalah is based on the actual return of the accepting bank (Wakil) on the maturity date. However, if Bank Islam is the Wakil for the above contract, the profit to be paid to the investing bank (Muwakkil) will be based on the following conditions:

  • If the actual return is above the Expected Return, the Bank will only pay the Expected Return to the Muwakkil. Any excess profit will be retained by the Bank as a performance incentive.
  • If the actual return is below the Expected Return, the Bank is obliged to pay the actual return to the Muwakkil.
Minimum Amount Negotiable
Minimum Tenure Negotiable
Qualified Investor
(Self Suitability Assessment)
  1. All financial institutions that are accorded with ‘Interbank’ status by BNM and are allowed to trade via local secondary market.
  2. All foreign financial institutions that are permitted.
Investment Confirmation Your receipt of an investment confirmation on the Interbank Wakalah (either from the Bank or from the Bank’s broker) will constitute a binding contract.Please inform the Bank immediately if there is any discrepancy contained in the investment confirmation. If the Bank does not receive your confirmation within seven (7) days of our confirmation date, the Bank shall regard the confirmed transaction as correct and in order.

Important Notice : The contents of the above table, namely the details of Profit Rate, Minimum Amount and Minimum Tenure are subject to change at the sole discretion of the Bank and investor should obtain confirmation from the Treasury Sales Team prior to making any decisions based on the above.

By making a request for the IIA Wakalah, the customer understands the loss bearing or loss transfer feature of the Wakalah contract and acknowledge that the Bank has legal recourse against the investor to enforce its rights.

For further details, kindly contact our Treasury, Asset Liability Management Desk at 03-2090 1610 / 1611.

Note : Information contained herein is accurate as of the time of publishing and subject to change in accordance with applicable rules, regulations or guidelines issued by Bank Negara Malaysia from time to time. All products offered by Bank Islam are subject to the Islamic Financial Services Act 2013 and any applicable laws derived therefrom.

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