392 AN INTRODUCTION TO ISLAMIC FINANCE
- See Ali (2004) and Chapra (2006).
- Chapra (2006) puts forward the idea of creating a common pool at the central
banks to provide mutual accommodation to banks in case of need. All banks
may be required to contribute a certain mutually agreed percentage of their
deposits to this common pool, just as they do in the case of statutory reserve
requirements. They would then have the right to borrow interest - free from this
pool with the condition that the net use of this facility is zero (that is, drawings
do not exceed contributions) over a given period of time. In a crisis situation the
central banks may allow a bank to exceed the limit, with appropriate penalties,
warning, and a suitable corrective program. - Rajan (2006).
- Smith (1993).
- Iqbal (2005).
- See Chapra (2000); Khan and Habib Ahmed (2001); El - Hawary, Grais and
Iqbal (2004); and Grais and Iqbal (2006). - Creane et al. (2003).
- IRTI and IFSB (2006).
- Ibid.