 In this module, we would be looking into a variant of Tawarro. When we refer to Tawarro, it is primarily in the context of retail banking, Islamic retail banking. Most of the Sharia scholars involved in the advisory function of Islamic banking and finance, they would not recommend excessive use of Tawarro on the side of retail. However, there is almost a consensus amongst Sharia scholars that the use of commodity murabha for liquidity management by Islamic banks is actually a necessity and hence it should not be frowned upon. You will see that the basic structure of commodity murabha is actually exactly the same as Tawarro. However, its application is in a different context and hence a version to the use of commodity murabha is not as acute as in case of Tawarro. Some people say that Tawarro is not haram. However, I think this is a very strong statement. Tawarro is not haram. This is a valid Islamic mode of financing which requires a lot of precaution to be exercised before this is used in an Islamic financial product, especially a personal finance product. So, while Tawarro as a personal finance product is frowned upon by many, commodity murabha is actually quite popular for liquidity management by Islamic banks. Its structure is exactly the same as Tawarro. However, it's used for liquidity management is considered as a necessity. Let's look at the structure. This is a picture which must be now known to all of you because I have used this diagram many times in the last few modules. In case of Mudarba, I asked you to memorize it by heart. Now, this picture which I have used many times, this should be in your mind all the time. Whenever someone talks about Tawarro or commodity murabha, you should have these four pillars in mind. The customer, the bank, commodity broker one and commodity broker two. In this case, we have this bank A which is short of liquidity. By short of liquidity, I mean that this bank is in need of money. Maybe it has got a lot of new customers. Looking for financing, it doesn't have cash at hand. Hence, it would like to have some short-term cash available to us. Bank B actually has got a lot of cash. Now, because in case of Islamic banking and finance, extending loan on interest is not permitted, the bank B and bank A would enter into this commodity murabha transaction, which is like Tawarro. So, the excess liquidity bank would buy a commodity X from broker one on a spot basis and would sell it on to bank A, liquidity short bank A on a deferred payment basis. Normally, this is about 30 days transaction. The bank would then immediately sell that commodity to broker two for its spot price and would generate the required liquidity, required money. And of course, bank A would then be paying the price, which would be the purchase price from commodity broker one. Say, if that is P, the price which the bank A would be paying to bank B would be P+. Normally, in liquidity management transactions, this P+, is a few basis points. Okay, basis points, a small amount of money, it's about 1000 of an amount. So, very small amount of profit margin is there in case of commodity murabha transactions because they are normally short-term. There are certain commodity murabha transactions, which could be only for one week, depending on for how long a bank is looking for liquidity from another bank, which has got excess liquidity. So, price movement is just like Tawarro as well. Hence, we say that commodity murabha and Tawarro in terms of structure, they are exactly the same. However, there is a lot more acceptance of commodity murabha in Islamic banking and finance because it serves a very, very important purpose, i.e., that of liquidity management by Islamic banks and financial institutions. For very long, this commodity murabha transaction was not allowed in Pakistan, but lately the regulator has allowed execution of commodity murabha transactions on the Pakistan Mercantile Exchange and with this help or with this new development, some of the Islamic banks operating in the country have started using commodity murabha as a liquidity management tool in Pakistan.