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02 October 2009
On July 7 2009 Bank Indonesia issued the Regulation on an Intra-day Liquidity Facility Based on Shariah Principles (11/30/PBI/2009). The intra-day liquidity facility is Bank Indonesia's attempt to facilitate smoother payments for banks that operate on the basis of Islamic and shariah principles. It is hoped that the facility will help to prevent payment gridlocks in money transfers or securities transfers that could cause wider instability in Indonesia's financial system.
The regulation allows shariah-compliant banks and banks with shariah business units to use the facility if they (i) hold shariah-based government debt securities (ie, sukuk) or Bank Indonesia's shariah-based commercial papers, and (ii) participate in Bank Indonesia's Real-Time Gross Settlement system and its Scripless Securities Settlement system.
The regulation came into force on the date of issue, revoking and replacing Regulation 7/24/PBI/2005.
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