Last Update 22:26
Monday, 18 June 2018

Egypt's cabinet approves draft law on Islamic bonds

Draft law will allow finance ministry and state-run administrative bodies to issue bonds which are in compliance with Islamic sharia law

Ahram Online, Thursday 20 Dec 2012
Islamic bonds
(Photo: Reuters)
Views: 1371
Views: 1371

Egypt’s cabinet on Wednesday approved a draft law on the issuance of Islamic bonds by the finance ministry and state-run administrative bodies, the State Information Service has reported.

The draft law will be referred to parliament before it officially passes into law.

Islamic bonds are similar to ordinary government treasury bills and foreign currency denominated bonds but are in compliance with Islamic sharia law.

New sectors, such as individual and investment funds, will now be able to lend money to the government through this financial tool (sukuk).

Because the traditional Western interest paying bond structure is not permissible under sharia law, the issuer of a sukuk sells an investor the certificate, who then rents it back to the issuer for a pre-determined rental fee. The issuer of the sukuk also makes a contractual promise to buy it back at a future date at par value.

According to the draft law, which has been published by Egypt's Tahrir newspaper, Islamic bonds will be listed and traded on domestic and global markets.

Short link:


Ahram Online welcomes readers' comments on all issues covered by the site, along with any criticisms and/or corrections. Readers are asked to limit their feedback to a maximum of 1000 characters (roughly 200 words). All comments/criticisms will, however, be subject to the following code
  • We will not publish comments which contain rude or abusive language, libelous statements, slander and personal attacks against any person/s.
  • We will not publish comments which contain racist remarks or any kind of racial or religious incitement against any group of people, in Egypt or outside it.
  • We welcome criticism of our reports and articles but we will not publish personal attacks, slander or fabrications directed against our reporters and contributing writers.
  • We reserve the right to correct, when at all possible, obvious errors in spelling and grammar. However, due to time and staffing constraints such corrections will not be made across the board or on a regular basis.

© 2010 Ahram Online.