Islamic Banks and Central Banking

15 Pages Posted: 18 Oct 2017

See all articles by Arshadur Rahman

Arshadur Rahman

Bank of England - Sterling Markets Division

Date Written: September 15, 2017


Islamic banking is a growing sector of the financial services industry, but Islamic law (Shari’ah) does not permit the payment or receipt of interest. This poses a problem for central banks that only offer interest-bearing liquidity facilities to banks. This article explores the ways in which a central bank can establish a liquidity facility that is compliant with Shari’ah, along with the model we have decided to adopt for our new Shari’ah-compliant facility.

Suggested Citation

Rahman, Arshadur, Islamic Banks and Central Banking (September 15, 2017). Bank of England Quarterly Bulletin 2017 Q3. Available at SSRN:

Arshadur Rahman (Contact Author)

Bank of England - Sterling Markets Division ( email )

United Kingdom

Register to save articles to
your library


Paper statistics

Abstract Views
PlumX Metrics

Under construction: SSRN citations while be offline until July when we will launch a brand new and improved citations service, check here for more details.

For more information