Short-term Shariah-compliant Islamic liquidity management instruments to sustain Islamic banking: the case of Maldives

The purpose of this paper is to describe the structure of the Islamic treasury bills issued by the Central Bank of Maldives, Maldives Monetary Authority (MMA) for the benefit of those jurisdictions that aspire to introduce short term Islamic liquidity management instruments. This is exploratory research where the experience of the author in structuring the Islamic liquidity management instruments discussed in the paper. It is evident from the discussions of this paper that innovation is the key to structure Shari’ah compliant short term liquidity management instruments. The example of Maldives has proved that there is a need to amend the laws of the country to facilitate Central banks to deal with Shariah-compliant instruments.