The Central Bank of Malaysia said no to BIMB Holdings Bhd's plan to acquire Bank Islam through issuance of sukuk or Islamic bonds.The central bank rejected the Malaysian investment holding company's plan to issue an Islamic bond to come up with the USD 884 million it needed to fund the purchase.

Last month, BIMB Holdings proposed to issue a ten-year sukuk worth USD 456.66 million to get the 49% stake in Bank Islam that it does not yet own. Bank Islam is the largest and oldest Islamic bank in Malaysia. It is owned by Dubai Group and Tabung Haji.

BIMB Holdings proposed to secure the bonds with company shares. However, this proposal was not approved by the central bank. In a statement, BIMB said it would have to find an alternative asset to secure its bond offering.

BIMB Holdings Chief Executive Officer Johan Abdullah told Reuters, "We shall convene a special board meeting and further announcements will be made in due course."