This applied study was aimed at offering an insight into the understanding of the treasury activities of shari’ah compliant financial institutions in Islamic financial market. Archival studies on characteristics of the treasury instruments, observations and analysis on the mechanism of the instruments used in the markets were carried out in investigating any existence of shortcomings both in term of products as well as the dealing of transactions. Based on the findings of this study, contribution in term of suggestion for improvement as innovation was recommended. It was hoped to improve the current practices in handling the instruments and the mechanism in the market

Qualitative methods of research and exploratory approach were used in this study. Observation to research method and interviews were also employed in this study. They were applicable in looking into the research issues understudied. Additionally, descriptive study approach was also applied in this study. Capitalizing on the explored and examined shortcomings became the basis in suggesting action to be taken to improve the policies and procedures by the relevant institutions.