Professional Documents
Culture Documents
SERVICES
for:
Study Visitation By
Afghanistan Delegates
CORPORATEINVESTMENT
BANKING CONSUMER
BANKING
COMMERCIAL
BANKING TREASURY
SERVICES
ISLAMIC BANKING vs. CONVENTIONAL BANKING
KEY DIFFERENTIATING
ISLAMIC BANKING CONVENTIONAL BANKING
FACTOR
FUNCTIONS AND Based on the principles of Based on fully man-made
OPERATING MODES Shariah principles
INTEREST- BASED Absence of interest-based (riba) Most of the activities are interest-
TRANSACTIONS transactions based
RISK MANAGEMENT Islamic banks "bear the risk" Concerned with "elimination of
when involve in any transaction risk"
AIMS AT MAXIMIZING Subject to Shariah restrictions Without any restriction
PROFIT
PENALTY Charge in the form of tawidh It can charge additional money
(compensation) as determined (penalty and compounded
by the Shariah Advisory Council interest) in case of defaulters
of BNM.
BANK-CUSTOMER Partners, investors and trader, Creditor and debtors
RELATIONSHIP buyer and seller
SHARIAH CONTRACTS
SHARIAH
CONTRACTS
Rahnu
Syirkah Amal Immediate Deferred
Payment Payment Kafalah
Syirkah Inan
Bai Sarf Murabahah Wakalah
Cost benefit to client (no commitment fee and fixed finance cost)
20% discount on stamp duty for Islamic primary documents (extended up to 2015)
In line with Governments direction to GLCs in adoption of Islamic finance concepts for its
funding options.
Capitalize on innovative & dynamic alternative product (eg: fixed rate combination with
floating rate and ceiling rate as protection)
Page 7
CONSUMER FINANCING PRODUCTS
Page 8
Bank Islam Card-i
Customersettlestheamountdueas
peragreedtermswiththeBank
Buyer 6
Customersutilizes
facilityforpurchases
Bankcreditsthesaleproceedsinto
3 customersmarginalaccount 5
4
CustomerrequestBanktosellthe
Banksellsthe 2 commodity Customer
commodityon
behalfofthe
customer 1
Banksellscommoditytothecustomer
Page 9
Personal Financing-i
Customersettlestheamountdueas
peragreedtermswiththeBank
Buyer 5
Bankcreditsthesaleproceedsinto
3 customersaccount
4
Banksellsthe CustomerrequestBanktosellthe
commodityon
2 commodity Customer
behalfofthe
customer 1
Banksellscommoditytothecustomer
No deposit
Page 10
Vehicle Financing-i
Financing of
national & non-
national cars
Customersettles
theamountdue
2 4 Competitive rates
Banksellsthevehicle offered
ondeferredpayment Dealerdeliversthevehicleto
customer Selling price : fixed
3 and known
Customer CarDealer
No hidden or extra
1 charges imposed
11
Property Financing-i
Customersettlestheamountdueas
peragreedtermswiththeBank
2
Customerappliesforfinancing
Customer
3 4
Banksellscommoditytothecustomer Banksellsthe
commodityon
behalfofthe
customer Buyer
Customerpays 1
downpayment
Property 5
Developer/Vendor
Bankcreditsthesaleproceeds
12
Page 3
Salient Features
Bonus Benefits
Enjoy 2 months break on your monthly installments with our Payment Holiday features
(every November & December)
Enjoy No Payment During Construction (NPDC) up to maximum of 2 years for selected
residential projects
Page 13
Al - Waqf Home Financing-i
STATE
SRAappointsdeveloper
RELIGIOUS
AUTHORITY 1 DEVELOPER
(SRA)
3 2
Developer
handsoverthe Developer
completed constructsthe
property property
4 6
SRA Bankcreditsamountinto
leases developersaccount
the
property
Customerappliesforfinancing
5
LESSEE
7
Customersettlesamountdue
Al - Awfar Savings-i and Investment-i
Bankinveststhefunds
Bank
5 3 2
1 4 conducts
prizedraw Bankreceives
Customerplaces Bankpays
investment
deposit profitto
returns
customer
Prize
Draw
Customer Investment
6
Cashprizes
willbe
creditedin
toaccount
15
Salient Features
An innovative Mudharabah-based account that gives you the opportunity to win cash prizes
worth of RM2.32 million a year.
On a pre determined basis, a draw will be done and cash prizes will be paid to the winners.
The draw concept has been approved by the Bank's Shariah Supervisory Council (SSC).
Cash prizes with varying amount up till RM 1 Million are offered by the Bank periodically e.g.
1st prize RM200,000
2nd prize RM20,000
3rd prize RM1,000
4th prize RM500
Bank Islam also offers Al Awfar Junior with two types of accounts;
Trust account will be opened for the minor account holder
(Below 13 years old )
An individual account will be opened for the youth account holder
(Between 13 to 18 years old )
16
BUSINESS FINANCING PRODUCTS
Page 17
Business Financingi
Customersettlestheamountdueas
peragreedtermswiththeBank
Buyer 5
3 Bankcreditsthesaleproceeds*
4
Banksellsthe CustomerrequestBanktosellthe
commodityon 2 commodity Customer
behalfofthe
customer 1
Banksellscommoditytothecustomer
*depending on deal arrangement, proceeds may be credited direct to the customer or 3rd party (e.g.
vendor/financialinstitution)
Page 18
Salient Features
Financing of property, building, land and various types of assets acceptable to the
Bank.
Facility is also applicable for Opex & Capex financings as well as bridging or refinancing
of property/asset purposes
Page 19
Business Cashlinei
Customersettlestheamountdueas
peragreedtermswiththeBank
Buyer 6
3
CustomerrequestBanktosellthe
commodity
Banksellsthe 2 Customer
commodityon
behalfofthe
customer 1
Banksellscommoditytothecustomer
Marginal
4 Current
Deposit 5
Bankcreditsthesale Account Account
proceeds Customerutilisestheamountasand
whenitrequiresfunding
Page 20
Salient Features
Suitable for working capital and project financing purposes i.e. facilitates the
requirement of the customer for quick accessibility of cash
Utilization is by way of checking account as & when the customer requires funding
Page 21
Revolving Crediti
Customersettlestheamountdue
lumpsumonmaturitydate
Buyer
5
3 Bankcreditsthesaleproceeds
4
Banksellsthe CustomerrequestBanktosellthe
commodityon 2 commodity Customer
behalfofthe
customer 1
Banksellscommoditytothecustomer
Page 22
Ijarah Muntahiyah Bit Tamlik-i & Ijarah Thumma Bai
Banksellstheassettothecustomeruponmaturity
BankentersintoaIjarahMuntahiyahBitTamlik/
AITABagreementwiththecustomerandcustomerpays
rentalasperagreedterms
4
Customer
2
Customerappliesforfinancing(ijarah)
3 Vendor 1
Bankpaystheremainingpurchaseprice Customerpaysdown
payment
Page 23
Salient Features
Mainly used as asset financings for machinery, equipment, plant, commercial vehicle,
etc.
Competitive rates
Page 24
TRADE FINANCING PRODUCTS
Page 25
Letter of Credit-i
Customer 4 Exporter
Exporterdeliversgoods
Customer
paysthe AdvisingbankforwardLC Creditsexporters
Clientapplies 1 8 Bankas documents 3 7 account
forLC
agreed
AdvisingBankforwardshippingdocs
5
AdvisingBank
2
BankissuesLC
6
BankissuespaymenttoCorr.Bank
Salient Features
Provides platform for both parties to agree trade terms and efficient payment
arrangement
Operations is governed under Uniform Customs and Practice (UCP) for Documentary
Credit; International Chamber of Commerce Publication 600
The Bank may arrange marine cargo Takaful under the Banks panel for the customer
Upon settlement of LC, customer have the option to convert the LC into financing or
TWCF-i (Murabaha), Ijarah / AITAB
Page 27
Trade Working Capital Financing-i (Purchases/Sales)
BankentersMurabaha/DaynContractwith
thecustomer
2 Customer
3
Customer
Credittocustomersaccount requires
financing
5 4 1
Payon
PaysonMaturity Maturity
Vendor
Page 28
Salient Features
Enables the customers to settle payment obligation to its supplier or even get
immediate cash for their credit terms sales
Profit is chargeable upfront and is due for payment on maturity together with financing
amount requested
Page 29
Bank Guarantee-i
2 Customer
Apply BG-i
1
Contract
Issue BG-i
3
Beneficiary
4
Upon expiry, guarantee is returned to the bank for cancellation
Page 30
ADDED VALUE SERVICES
Page 31
Service Delivery Channels
CONSUMER BANKING
CENTERS CORPORATE DESKTOP
BANKING
AR RAHNU OUTLETS
Page 32
Branch Networks
Perlis - 1
Kedah - 10
Pulau
Pinang - 5 Kelantan - 9
Perak - 9 Terengganu - 5
Pahang - 9
Selangor & KL - 24
Labuan- 1
Negeri
Sembilan -5 Sabah - 5
Melaka - 4
Johor - 14
Sarawak - 6
Page 33
Self Service Terminals (SST)
ATM 8 CDM 4
ATM AutomatedTellerMachine
CQM 1 SP - 1 CDM CashDepositMachine
CQM ChequeDepositMachine
ATM 62 CDM 34
SP StatementPrinter
ATM 49 CDM 27
CQM 11 SP - 4
CQM 10 SP - 4
ATM 39 CDM 16
ATM 32 CDM 17
CQM 6 SP - 1
CQM 7 SP - 4
CQM 16 SP 7
Page 34
Consumer Banking Centres
Penang(1) Kelantan(2)
Terengganu(1)
Perak(1)
Selangor(2)
NegeriSembilan(1)
Melaka(1)
currently, 10 CBCs 8
9
CBC USIM
CBC Space U8, Bukit Jelutong
NS
SGR
20 Jan 2012
09 Mar 2012
another 1 new CBCs by end of 2012 ( in Sarawak) 10
CBC Universiti Pendidikan Sultan Idris, Tajung
PRK 04 May 2012
Malim
as part of the Spoke & Hub business model
Page 35
Ar-Rahnu (Pawn Broking) Outlets
KotaBharuOutlet
PasirMasOutlet
TanahMerahOutlet
PasirPutehOutlet
Page 36
Bureau de Change (BDC)
KotaKinabaluInternationalAirport
PenangInternationalAirport*
BukitBintang
BDC
KLIA LCCT
currently,4BDCs
4 Kota Kinabalu International Airport SBH 26 Jul 2012
another1newBDCs(PenangInternationalAirport)byendofDec2012
Page 37
THANK YOU
www.bankislam.com.my
Page 38
BANK ISLAM'S PRODUCT GROUPING OVERVIEW
Wadiah Savings & Current Account-i Property Financing-i,
FINANCING
FINANCING Cashline-i
Revolving Credit-i
EESS
Business Financing-i
CC
VVII
Tamleek- i
Ijarah Thumma Bai
TWCF-i
LC Wakalah
TWCF-i
Product Structure 1 AfterbeingapprovedwithRCifacilityand
documentationhasbeenperfected,customerrequests
forutilizationofthefacility.
Aqad 2 BankreceivesRCidisbursementdocumentsfrom
Execution customerandconductsnecessarycheckingon
customer'sfacilitylinelimit;e.g.:
3 LineLimit:RM10m
Utilization:RM2.0million
AvailableBalance:RM8.0million
4 RCiline 2
3 BankandcustomerperformandcompletetheAqad
transaction
4 AmountisdisbursedtotheCustomer
Islamic
Client 6 5 Customerisfreetorequestforadditionalutilization
Bank
providedthelinelimitisnotfullyutilized.*
6 ClientsettlesamountduetotheBankonmaturity
date.
Note:
1 *Step2,3&4willbeperformedduringeveryutilization
requestbytheCustomer
5 Availablelinelimitbalancefluctuatesasthelineisutilized
&amountdueispaidoff
Shariah View on Prize Draw
Resolution International Islamic Gambling Free
Fiqh Academy (IIFA)
1. The Al-Awfar product is based on a Mudarabah contract between
the Bank and its depositors as executed in the product documents.
IIFA in its 14th conference in Doha, Qatar on If there is any profit from the invested capital obtained from
the 11th - 16th January 2003 issued its 127th depositors, it will be distributed between the Bank and the
resolution in discussing on the status of contest depositors as per the pre agreed profit sharing ratio.
cards among others, are as follows;
1. All games and contests which prizes are taken 2. Cash prize draw serves as an additional incentive to encourage
from the cumulative amount of money (fees) depositors to save or invest with Bank Islam. Prizes will be given
gathered from contestants is prohibited as it to depositors from cash provided by the Bank and depositors who
contain elements of gambling did not win would not lose their deposits / investments, in fact
2. Contest prizes are only allowed in the case the depositors will receive their share of the Mudarabah profits.
where it is provided by a third party not Therefore this product does not fall under the category of al-
involved in the contest or the prizes were maisir nor al-qimar which are prohibited in Islam.
taken from fees of a segment of participants
and not overall. Draw/ Qur`ah
3. Contests offering prizes are permissible if:
1. Dar Ifta al-Misriyyah which is the authority in issuing fatwas in
Egypt and consist of the countrys prominent scholars from
Purpose and application methods are allowed
University of Azhar issued a resolution registered under 19752
by Shariah
which explains clearly on its legality from a Shariah point of view.
Prizes do not originate from fees taken from all
participants 2. In summary draw is permissible according to Shariah, as it is a
Contest should not lead to neglect matters that method to determine not to prohibit (what is halal) nor to allow
are obligatory nor indulgence in prohibited (what is haram) and it has been a known practice since ages
activities before.