Society for Worldwide Interbank Financial Telecommunication (SWIFT) has said that ISO 15022 message standards for the processing of treasury murabaha transactions have been certified compliant with the international Islamic finance standards issued by AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions).
This certification paves the way towards the automated processing of Murabaha treasury transactions, which reportedly represent 60% of all Islamic financing.
Murabaha includes a money transfer and a commodity trade. SWIFT has carried the money transfer for many years, whilst the commodity trade has been completed manually, usually by fax without any globally agreed standard.
SWIFT said that its solution uses the ISO 15022 message standards within the guidelines of a Murabaha Standards Rulebook.
AAOIFI secretary general Mohamad Nedal Alchaar said that AAOIFI’s collaboration with SWIFT aims to build a well-structured and well-regulated international Islamic finance infrastructure.
The use of ISO 15022 messages over SWIFT does not change the current process between banks, their customers and brokers. However, the data defined in the schedules under the terms of the Master Murabaha agreement is now exchanged using standardized messages via SWIFT as opposed to bilaterally agreed confirmations exchanged manually, SWIFT said.