Islamic Development Bank's International Islamic Trade Finance Corporation (ITFC) has selected HSBC as key partner for trade operations. HSBC will implement its Shariah-compliant trade financing and provide help on various treasury activities such as joint trade financing and investment of liquidity.
Under the agreement, HSBC will facilitate the issuance of letters of credit on behalf of ITFC for customers who import or export goods backed by two global financial institutions.
HSBC said it will cooperate with ITFC in joint trade financing through syndication and co-financing besides facilitating trade.
ITFC is also expected to invest its liquidity in Shariah-compliant investment assets such as HSBC’s overnight commodity murabaha investment product.
HSBC global head of trade & supply chain Rakesh Bhatia said this is a landmark deal for both organisations and demonstrates HSBC’s commitment in supporting the fast growing Islamic trade routes, especially between Middle East and Asia.
"It not only cements HSBC’s credentials as the leading trade bank for both conventional and Islamic trade solutions but also helps ITFC achieve its brand promise of advancing trade, improving lives," Bhatia added.