Feasibility Study of Designing the Banking Convertible Sukuk

Loan Securitization technique is among the solutions for credit risk elimination and liquidity risk reduction in conventional banking system framework. Many banks use this technique to enhance their lending and quality. Economic firms and corporations have considerable share in these funding in the form of the Islamic contracts. Setting up a portfolio in the from a firm’s current debts or securitization of a firm’s liabilities with convertibility option to stocks، along with other securitization methods، is a suitable solution to revive banking resources. On the other hand، convertibility option to stocks helps companies settle their debts to their creditors. In this research، firstly the concepts of securitization and sukuk with a descriptive-analytic and attributive method، is described، then an operational model for convertible banking sukuk along with juridical dimensions is proposed. The paper continues by providing five financial functions of the proposed security.