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BANK ISLAM PRODUCTS &

SERVICES

for:
Study Visitation By
Afghanistan Delegates

26 February 2013 / 15 Rabiulakhir 1434


Menara Bank Islam
CORE BUSINESS

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

PARTICIPATING TRADING SUPPORTING

Rahnu
Syirkah Amal Immediate Deferred
Payment Payment Kafalah
Syirkah Inan
Bai Sarf Murabahah Wakalah

Mudharabah Trading Gold & Bai Tawliyyah Wadiah


Silver
Bai Dayn Bai Salam Qardh

Bai Istisna Hiwalah

Bai Istijrar Tabarruq,


Waqaf & Hibah
Bai Inah
Ibra, Muqasah
Ijarah, IMBT &
AITAB
PRODUCTS OFFERINGS
Consumer Banking Corporate Investment Banking
Bank Islam Card (Master & Visa) Corporate Banking
Personal Financing Corporate Finance & Advisory
Vehicle Financing Debt & Capital Markets
Home & Fixed Asset Financing Syndication
Savings Accounts
Current Accounts Treasury
Electronic Banking Corporate deposit placements
i-Tap Foreign Exchange

Commercial Banking Others


Business Financing Cash Management
Cashline Wealth Management
Leasing & Hire Purchase
Trade Finance
Bridging Finance
Equity Financings
WHY GO FOR ISLAMIC BANKING?

Cost benefit to client (no commitment fee and fixed finance cost)

Strong Government support to promote Malaysia as the Islamic Financial Hub

20% discount on stamp duty for Islamic primary documents (extended up to 2015)

Conversion (refinance) of conventional loan to Islamic facility is stamp duty exempted

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)

For Corporate, profiling to global Islamic investors

Sound Legal framework


Islamic banking falls within regular civil courts jurisdiction
Centralised National Shariah Advisory Council
BANKING
PRODUCTS &
SERVICES

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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

No annual fee Cash rebate on retail transaction

No compounding finance charges Low balance transfer rate

20-day finance charge-free period Low cash withdrawal fee

Free Takaful coverage on outstanding balance

Page 9
Personal Financing-i
Customersettlestheamountdueas
peragreedtermswiththeBank
Buyer 5

Bankcreditsthesaleproceedsinto
3 customersaccount

4
Banksellsthe CustomerrequestBanktosellthe
commodityon
2 commodity Customer
behalfofthe
customer 1
Banksellscommoditytothecustomer

Competitive rate No processing fee

No hidden charges Flexible financing tenure

No guarantor is required Selling price fixed and known

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

Customerpaysdownpaymenton Nominal stamp duty


behalfoftheBank

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

High Margin Of Financing up to 90%


Financing of :
Mortgage Reducing Term Takaful (MRTT)
Long-Term House Takaful (LTHT)
Stamp Duty
Legal Fees
Valuation Fees
Longer Financing Tenure of Up to 40 Years or age 65, whichever is earlier
Competitive Financing Rates

Better Cost Saving


20% discount on Stamp Duty
No Processing Fees

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

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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

To be eligible, a minimum deposit is required as the following;


Savings-i : RM100
Investment-i : RM1,000 (1 month) and RM500 (3 months 60 months)

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 )
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BUSINESS FINANCING PRODUCTS

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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)

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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

Pricing can be equally competitive as compared to conventional Term Loan

Financing rate is available in either fixed or floating mechanics

Tenor ranges; from medium to long term

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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

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Salient Features

An alternative product to conventional bankings Overdraft facility

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

Profit is charged based on utilization of customer

Cashline can be also used as the operating account of the customer

No commitment fee is chargeable over unutilized limit

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Revolving Crediti
Customersettlestheamountdue
lumpsumonmaturitydate
Buyer
5

3 Bankcreditsthesaleproceeds

4
Banksellsthe CustomerrequestBanktosellthe
commodityon 2 commodity Customer
behalfofthe
customer 1
Banksellscommoditytothecustomer

Suitable for working capital and project financing Competitive pricing


purposes
No commitment fee is chargeable over unutilized limit
Utilization is based on customers request for
funding for a determined period i.e. short term of 1 Mainly facility is offered to corporate clients
up to 6 months

Profit is chargeable upfront during utilization


request for the facility and payable end tail together
with financing amount

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Ijarah Muntahiyah Bit Tamlik-i & Ijarah Thumma Bai

Banksellstheassettothecustomeruponmaturity

BankentersintoaIjarahMuntahiyahBitTamlik/
AITABagreementwiththecustomerandcustomerpays
rentalasperagreedterms

4
Customer
2
Customerappliesforfinancing(ijarah)

3 Vendor 1
Bankpaystheremainingpurchaseprice Customerpaysdown
payment

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Salient Features

An alternative product to conventional bankings Leasing and Hire Purchase facilities

Mainly used as asset financings for machinery, equipment, plant, commercial vehicle,
etc.

Tax advantage for the customer

Competitive rates

For equipment/machinery supplied by foreign supplier/vendor, a specific Letter of Credit


(LC-i) can be arranged by the Bank to facilitate the importation. Subsequently, the LC-i
will be converted into IMBT or AITAB

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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

No transit interest charges as payment to Seller/Beneficiary only upon acceptance of


documents

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

Competitive financing rates for 1 up to 6 months

Profit is chargeable upfront and is due for payment on maturity together with financing
amount requested

Financing may be up to maximum of 100% invoice value

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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

BRANCH INTERNET BANKING


NETWORKS

CONSUMER BANKING
CENTERS CORPORATE DESKTOP
BANKING

AR RAHNU OUTLETS

ELECTRONIC BANKING SMS BANKING


BUREAU DE CHANGE CENTERS

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

127 branches by end 2012


150 branches by 2015

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

ATM 50 CDM 17 ATM 38 CDM 21

CQM 10 SP - 7 CQM 7 SP - 2 ATM 2 CDM 1

ATM -148 CDM 53 CQM 1 SP - 1

CQM 26 SP - 10 ATM 30 CDM 12

CQM 3 SP - 1 ATM 30 CDM 15

ATM 78 CDM- 37 CQM 6 SP -3

CQM 16 SP 7

ATM 31 CDM 14 ATM 57 CDM 26

CQM 6 SP -2 CQM 13 SP -4 Location Type AT CDM CQM SP Total


M

Branch 271 197 109 43 620

Shopping Centers 94 14 4 1 113


ATM 31 CDM 12

CQM 6 SP -1 Academic 119 19 4 4 146


Buildings

Corporate Offices 69 28 11 4 112

Others 132 48 1 0 183

Total 685 306 129 52 1172

Page 34
Consumer Banking Centres

Penang(1) Kelantan(2)

Terengganu(1)
Perak(1)

Selangor(2)
NegeriSembilan(1)
Melaka(1)

No. Location State Day 1


Johor(1) 1 CBC Padang Garong KLN 01 Mar 2009
2 CBC Batu Pahat JHR 02 Oct 2009
3 CBC Ar-Rahnu KB KLN 10 Jun 2010
4 CBC UiTM Puncak Alam SGR 25 Jun 2010
5 CBC Universiti Darul Iman Malaysia / UniSZA TRG 12 Aug 2010
6 CBC Seberang Jaya PNG 17 Feb 2011
7 CBC Bandar Melaka MLK 09 Sept 2011

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

No. Location State Day 1


1 Kota Bahru KLN 10 Jun 2010

2 Pasir Puteh KLN 15 Jul 2010


another3byDec@2012
3 Pasir Mas KLN 29 Jul 2011
(Kuantan,KualaTrengganu&
KubangKerian) 4 Tanah Merah KLN 28 Jun 2012

Page 36
Bureau de Change (BDC)

KotaKinabaluInternationalAirport

PenangInternationalAirport*

BukitBintang
BDC

KLIA LCCT

No. Location State Day 1


ContactPier,
1 LCCT, Sepang SGR 15 Dec 2008
KualaLumpurInternationalAirport
2 Contact Pier International, KLIA SGR 01 Oct 2010

3 Bukit Bintang KL 03 Dec 2010

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,

Al Awfar, Mudharabah, Vehicle Financing-i


General and Sakinah Investment-i
G
IN
EP
EKE
F
SA Personal Financing-i
Credit Card-i

FINANCING
FINANCING Cashline-i

Revolving Credit-i
EESS

Business Financing-i
CC
VVII

Ijarah Muntahiyah Bit


RR
SSEE

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.

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