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The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a shariah-based multilateral insurer and member of Islamic Development Bank Group, has signed a documentary credit insurance policy with Bahrain-based Al Baraka Islamic Bank.
As per the deal, ICIEC will provide insurance coverage for the confirmation of Letters of Credit (LCs) issued by Al Baraka Islamic Bank in connection with the import and export of eligible shariah-compliant goods and services, said the Corporation in a statement.
This solution will help mitigate payment risks associated with cross-border trade while promoting sustainable growth in ICIEC’s member states, it stated.
The DCIP serves as a vital tool for Islamic banks, enhancing their ability to expand trade finance operations with reduced exposure to commercial and political risks.
The policy also complements ICIEC’s broader mandate to promote economic resilience, financial inclusion, and private sector development in member countries.
It aims to strengthen support for shariah-compliant trade finance, enabling greater security and confidence in the international trade ecosystem, remarked Dr. Khalid Khalafalla, Chief Executive Officer of ICIEC, after signing the deal with Dr. Adel Salem, Chief Executive Officer of Al Baraka Islamic Bank BSC Bahrain,
"This strategic collaboration with Al Baraka Islamic Bank reflects ICIEC’s unwavering commitment to advancing intra-OIC trade and investment," he noted.
"By supporting shariah-compliant trade finance through our Documentary Credit Insurance Policy, we are facilitating secure trade flows while empowering Islamic banks to broaden their offerings to clients. This partnership demonstrates the power of multilateral cooperation in achieving shared development goals," he added.
Both institutions reaffirmed their shared dedication to expanding the reach of Islamic finance, strengthening risk mitigation tools, and contributing to inclusive and sustainable economic development, said the statement.
The duo is putting in a joint effort to enhance the capacity of Islamic financial institutions to manage trade-related risks more effectively, it added.
Dr Salem said: "We are delighted to partner with ICIEC on this pioneering Credit Insurance Policy, which empowers us to extend shariah‑compliant trade finance to our clients, bolster Bahrain’s role as a regional hub for Islamic banking, and stimulate sustainable economic growth across member states worldwide."
"This collaboration underscores our unwavering commitment to innovation and robust risk management, giving the businesses we serve greater confidence to expand in global markets," he added.-TradeArabia News Service