Assignment on Islami Bank Bangladesh Account Types

Al-Wadeeah Current Account

• The deposit is accepted in the AWCA under Al-wadeah principle of Islamic Shariah. The deposited money is invested along with other deposits by the Bank according to Islamic Shariah.  Here, the customer does not have any share in the profit.  The transaction can be made more than once during the banking hour.

  The account can only be opened with the introduction of any acceptable  client/ current account holder of the Bank. In order to open Al-wadeah Current Account, a minimum amount of Tk.500/= is to be deposited and   the minimum balance with minimum amount of Govt. tax is to be maintained in the account. The Bank reserves the authority to return cheque, if otherwise.

  Withdrawal may be made through the cheques supplied by the Bank. In that case all articles of Negotiable Instrument Act are applied.

  Incidental charge @ Tk.50.00 half yearly basis is deducted from the account where minimum balance is not maintained. Closing charge @Tk.50.00 will be realised while closing the account

  For the first cheque book, the customer has to apply   in a specified form (F-6) and then for new cheque book the customer shall have to apply through the requisition slip supplied with the previous cheque book.

  The customer has to count the pages of the cheque book at the time of receiving the same. The book   should be maintained safely so that no cheque may be misused or stolen or destroyed. The Bank will not be responsible for any forgery if occurred by the stolen cheque (s).

  The account holder shall have to use the specimen signature put in the Bank while withdraw money and in case of other correspondence with the Bank. In order to change the specimen signature put earlier the operator shall have to apply in writing before well in time.

  The bank usually allots separate A/c. Nos. to different A/c. holders. The depositors have to mention name and No. of the account while fill-up the deposit slips for depositing the cash/cheque and obtain receipt duly signed by the authorised bank officials. The cheque to be deposited should be marked ‘Crossed’ i.e. A/c. Payee/ & co. etc. in the proper place of the cheque. If the deposited cheque(s) etc. is/are returned unpaid to the bank, charge/commission will be realised as per norms.

  The Bank records the instruction of ‘Stop Payment` with care. But the Bank will not be held responsible if any fraudulent withdrawal is/are made through stopped cheque (s).

  The Bank supplies statement of account every month.

  The bank has right to deduct any account to realise necessary expenditure/postal charge. Moreover, any tax imposed by the Govt. will be deducted from the account.
The Bank preserve the right to close the account without showing any cause.

  The changed address (if applicable) should be informed to the Branch immediately. The bank makes correspondence with the customer through postal services. The Bank will not be held responsible if any letter (cheque/Bill) is not delivered in time or not delivered at all, ]

  In case of joint account, if any of the A/c. holders expired the operation in the account will be stopped just after getting report and balance in that account will be paid as per norms to the heirs of the deceased and the alive A/c. holder(s); if there is any outstanding investment liabilities, the alive account holder/heirs of the deceased is/are bound to adjust the same.

  The Bank consciously sums up the credit/debit of the account. If any amount is credited/debited through mistake, Bank can re-write the balance.

  The unused cheque(s)   must be returned   to the Bank at the time of closing of the account.

  The account holder(s) can select nominee’s) to receive the balance of the account in case of death of the account holder.

  In case of death of the account holder, the nominee’s) has to submit the following papers/documents in support of his/their nomination to receive the balance of the concerned account:
a) Death Certificate regarding death of the account holder

b)Certificate from 2 (two) valued clients of the Bank or 2 (two) officers of the Bank or the Chairman/Ward Commissioner of the Union Parishad/Municipality in support of the identification of the nominee’s).

c) Attested Passport size photographs of the nominee’s.

d) Indemnity Bond (C.F.-12) duly executed by the nominee’s) under sureties of 2 (two) valued clients each good for the amount and acceptable to the Bank.

  The Bank reserves the authority to change, develop or reform/modify the rules of the account any time and the client is bound to abide by the same.

Mudaraba Savings Account

Mudaraba Term Deposit Receipt

Mudaraba Special Notice Account

Mudaraba Special Savings (Pension) Account

Islami Bank Bangladesh Limited, in keeping with its welfare-oriented ideals based on Shariah Principles, has developed a deposit pension scheme named “Mudaraba Special Savings (Pension) Scheme”, in order to mobilise and encourage the middle and lower middle class professional and service holders to save as per their capacity for their old age when they will normally retire from their active service life who otherwise do not like to keep and invest their savings and funds in interest bearing deposit pension schemes. Due to lack of or limited scope for savings and investment in non-interest bearing schemes, most of these individuals either consume their savings/funds or spend the same in unproductive expenditures. Thus a substantial amount of Savings/funds remain out of the production cycle.

The savings/funds of these people can play a vital role in capital formation and as a source of invisible fund for generation of income and increase of wealth of the individuals and of the nation. The scheme developed by Islami Bank Bangladesh Ltd. has already been accepted cordially by the lower and middle income group of people and thus it is expected to have great prospect in mobilization of small savings and funds for deployment in income and employment generating activities and business. In view of the above the Bank has introduced “Mudaraba Special Savings (Pension) Scheme”.

Amount of deposit installments 

Accounts under this scheme may be opened for monthly deposits of Tk. 100/-, Tk. 200/-, Tk. 300/-, Tk. 400/-, Tk. 500/-, Tk. 1000/-, Tk. 1500/-, Tk. 2500/- and Tk. 5000/- only. The deposit will be received on Mudaraba Principle.

Mudaraba Hajj Savings Account

Hajj is one of the fundamental worship (Ibadah) of Islam. However, because of the prevailing socio-economic situation in the country, the people interested to perform Hajj cannot arrange the required amount of money at a time to perform Hajj. The desire of many to perform Hajj is thus never fulfilled. Over twenty five thousand devoted Muslims from Bangladesh perform holy Hajj every year. Financial solvency and physical fitness are the pre-requisites of performing Hajj. The majority of the people, however, reach the fag end of their life in arranging the required amount of money for Hajj. Islami Bank Bangladesh Limited has, therefore, introduced “Hajj Savings Scheme” so that persons eager to perform holy Hajj may build-up savings through ‘Mudaraba Hajj Savings Account’.

Salient Features

• Mudaraba Hajj Savings Account can be opened in the name of the individual only.
• Deposits in this account are received on the basis of Mudaraba principle of Islamic Shariah.
• No photography is required to open this account.
• The Bank issues pass-book against this account. After the deposit of each instalment, the depositor must ensure that such deposit is recorded in the pass-book. If the pass-book is lost, the Bank shall charge Taka 10/- for issuance of new pass-book.
• The account holder must immediately communicate to the Bank of any change of the address.
• Persons eager to perform Hajj within the period of one to twenty five years may build-up savings to perform Hajj by depositing monthly instalment.
• The under mentioned chart indicates the year-wise monthly instalments of persons intend to perform Hajj in 2001, 2002 and 2003. The monthly instalment shall be applicable on the basis of opening year of the account.
• Profit shall be disbursed over the deposit on the basis of daily balance by giving 1.10 weightage, which is more than that of 3 year term deposit.
• If any depositor intends to perform Hajj before the maturity of deposit, then he can do so by depositing the balance amount fixed for the year alongwith his savings in the Mudaraba Hajj Savings Account.
• If any depositor, for some reasons, is unable to perform Hajj and wants to withdraw the deposited money, he shall get profit over the deposit at the rate of profit applicable for Mudaraba Savings Account.
• Mudaraba Hajj Savings Account can be transferred from one Branch to another upon application from the depositor on genuine ground.
• Money can not be withdrawn from Mudaraba Hajj Savings Account and as such no cheque-book is issued.
• In a year there shall be 12 instalments, 60 instalments in 5 years and 300 instalments in 25 years.
• Regular instalment shall have to be deposited within first 10 days of the month. Advance deposit of investment is acceptable.
• If any depositor fails to deposit 3 instalments consecutively then his Mudaraba Hajj Savings Account shall be void and such depositor shall get profit at the rate of profit given to Mudaraba Savings Account. But if the arear of one or two instalments are deposited alongwith the next regular instalment, the account shall remain operative. But if such irregular practice is repeated within the same year the account shall become void.
• At the end of the period if the total deposited amount including profit becomes less than the actual expenditure for Hajj in that particular year then the depositor may perform Hajj by depositing the balance amount.
• At the end of the period, if it appears that the actual expenditure for Hajj in that particular year is less than the deposited amount including profit, then the excess amount shall be refunded.
• In case any depositor under Hajj Savings Scheme fails to perform Hajj in the year of maturity and desires to perform Hajj subsequently, he may be allowed the benefit of Hajj Savings Account up-to the date of maturity and for the subsequent period till performance of Hajj at Mudaraba Account rate of profit.
• All categories of employees of Islami Bank Bangladesh Limited are eligible to participate in this Scheme.
• The Bank, at any time, may modify, revise and cancel, amend and rescind any rule of this account and the depositor shall be bound to abide by them.

Mudaraba Savings Bond Scheme

Savings play an important role in capital formation, income-generation and creation of employment opportunities and contribute towards the increase in wealth of the individual and nation through profitable investment.

The people generally try to save a portion of their income with a view to protecting themselves from future financial hardship and also to enhance their earnings for their own benefit and the benefit of their family and the nation as a whole. Bangladeshi wage earners living abroad and the retired service holders desire to invest their earnings and retirement benefits in safe and profitable investment schemes. Many a people, however, cannot deploy their fund in business for various reasons. The people of Bangladesh are deeply religious and committed to Islamic way of life and determined to conduct their economic activities in accordance with the tenets of Islamic Shariah. Naturally they want to avoid interest in transaction and business which is forbidden by Islam.

Islam encourages savings, which is the prerequisite for any sustainable economic development. The saying of Holy Prophet (PBUH) is that poverty leads to unbelief and therefore, people have been encouraged to save a portion of their earnings to protect themselves from future financial setback. Islam emphasises in the cycling of surplus capital by investing such funds in productive economic activities that will pave the way for employment, development and progress.

The people of Bangladesh reluctantly invest in interest bearing schemes. The religious Muslims, however, avoid such investments and the idle funds are mostly being consumed to meet the avoidable family demands. Thus the major portion of savings remain out of the production process. Islami Bank Bangladesh Limited, has therefore, introduced the savings deposit accounts viz. Mudaraba Savings Account, Mudaraba Term Deposit Account, Mudaraba Hajj Savings Account, Mudaraba Special Notice Account and Mudaraba Special Savings (Pension) Scheme as per Islamic Shariah. Mudarabah Special Savings (Pension) Account has also been introduced recently. Islami Bank Bangladesh Limited, being encouraged by the success of the Mudaraba deposit accounts has, therefore, introduced yet another savings scheme namely “Mudaraba Savings Bond Scheme”.

Objectives

• To offer investment opportunity to the people and institutions who do not like to keep their savings and funds in interest bearing deposit accounts or invest in interest bearing schemes.
• To facilitate deposit and investment of funds of the wage earners and retirement benefits of the service holders.
• To encourage savings by offering a safe and profitable investment outlet through sharing of a portion of the profit out of investment of their deposited money as per Islamic Shariah.
• To extend the Bank’s Schemes for mobilisation of savings, generation of income, creation of employment and enhancement of wealth of the individual and the nation through profitable investment of these savings as per Islamic Shariah.
• To encourage participation of the people in Islamic banking system and development of the economy in line with the principle of Islamic Shariah.

  Eligibility

• Person(s) aged 18 years and above shall be eligible to purchase Mudaraba Savings Bond(s) in single name or in joint names.
• Educational Institutions, Clubs, Associations and other non-trading and non-profit Socio-economic Institutions shall also be eligible to purchase Bond(s) in the name of the Institutions.
• Guardian(s) shall be allowed to purchase Bond(s) jointly with a minor mentioning the age of the minor. Payment against such Bond(s) shall be made on the basis of joint signature after the minor attains majority.
• Father/Mother/Legal Guardian shall be eligible to purchase these Bonds on behalf of one or two minors mentioning the name and age of the minor(s) and also instructions regarding payment encashment.

Denomination

Mudaraba Savings Bond shall be available in Tk. 1,000.00, Tk. 5,000.00, Tk. 10,000.00, Tk. 25,000.00, Tk. 50,000.00, Tk. 1,00,000.00, Tk. 5,00,000.00 and Tk. 10,00,000.00 denominations.

Purchase Ceiling

Purchase ceiling of Mudaraba Savings Bond is minimum Tk. 1,000.00. Any amount of Bonds can be purchased subject to availability.

Purchase Procedure

Eligible purchaser(s) shall be entitled to purchase Mudaraba Savings Bonds in single or in joint names or in the name of Institutions from the Branch of the Bank. The purchaser(s) shall have to apply in prescribed form of the Bank and fulfil the terms and conditions in this respect.

Period of Maturity

        5 (five) years
8 (eight) years.

Profit Sharing & Weightage

The Bondholders shall share income derived from investment i.e. income from the use of the funds in economic activities permitted by Islamic Shariah. This includes profit, dividend, capital gains, rent and any other income derived from investment
Bondholders shall get minimum 65% of the income derived from the deployment of Mudaraba fund in the investment during any accounting year according to their proportion in the total investment applying the following weightages:

Type of Bonds                                                                        Weightage

8 years Mudaraba Savings Bond          :                                       1.25
5 years Mudaraba Savings Bond          :                                       1.10

Encashment

For encashment of Mudaraba Savings Bonds, the Bondholder(s) or their nominee(s) [in case of death of the purchaser(s)] shall have to present the Bond(s) and the related papers in original duly discharged as per rules, to the Branch of the Bank where from the Bonds were purchased. The concerned Branch shall verify the signatures and other particulars and if found in order, then make payment with profit to be calculated on the basis of period covered at the time of encashment.

Other Benefits

• Mudaraba Savings Bonds can be purchased in single name or joint names and there shall be provisions for nominating nominee(s).
• Photographs shall not be required with application for purchase of the Bonds.
• Mudaraba Savings Bond shall be acceptable as security.
• If original Bonds are lost or damaged due to theft, fire etc. there shall be arrangement for issuance of duplicate Bonds after due verification.
• Mudaraba Savings Bond holders alongwith other Mudaraba depositors shall get preference in the matter of investment of their deposits over the Bank’s equity and other cost free funds.
• Income derived from the investments during the accounting year shall at first be allocated to the Mudaraba deposits and cost free funds (including Bank’s equity) according to their proportion in the total investment as per principles of distribution of profit to Mudaraba depositors

Mudaraba Foreign Currency Deposit Scheme (Savings)

Islami Bank Bangladesh Limited has introduced a new deposit product titled ‘Mudaraba Foreign Currency Deposit Scheme (Savings)’ under Mudaraba principle and endeavouring to invest the foreign currency funds in profitable way through its Foreign Correspondent Banks under Shariah Principle so as to enable the Bank to pay profit to its FC/PFC depositors, who will intend to open/maintain Mudaraba Foreign Currency Deposit (MFCD) Account particularly in US Dollar. This Scheme offers investment opportunities to wage earners and other private Foreign Currency Account holders who do not like to keep their funds in interest bearing deposit accounts or invest in interest bearing schemes. To encourage savings in Foreign Currency by offering a safe and profitable opportunity to the savers/investors by way of sharing a portion of the profit out of the investment of their funds as per principles of Shariah and to extend the Banks Deposit Scheme for mobilisation of remittance of Bangladeshi expatriates to increase the opportunity for their income generation and increase in the wealth of individuals and of the nation through profitable investment as per Shariah principles are the special features of the Scheme.

Objectives

• To offer investment opportunity to the Wage Earners and other private Foreign Currency account holders who do not like to keep their funds in interest bearing deposit accounts or invest in interest bearing schemes.
• To encourage savings in Foreign Currency by offering a safe and profitable opportunity to the savers/investors by way of sharing a portion of the profit out of the investment of their funds as per principles of Shariah.
• To extend the Bank’s Deposit Scheme for mobilization of remittance of Bangladeshi expatriates to increase the opportunity for their income generation and increase in the wealth of individual and of the nation through profitable investment as per Islamic Shariah Principles.

Eligibility of the Persons/Firms for opening MFCD A/c(s)

1. Bangladeshi nationals residing, working and earning abroad.
2. Foreign nationals residing inBangladesh and also Foreign Firms registered abroad and operating inBangladesh.
   1. Foreign missions and their expatriate employees.

Opening of the Account (Currency, Type and withdrawal)

1. Account may be opened in US Dollar, Pound Sterling or other eligible currencies at the option of the account-holder (However, at the moment Deposit in such account will be accepted only in US. Dollar).
   1. Types of account will be “Mudaraba Foreign Currency Deposit Account”.

Payment of Profit

• Initial Deposit must be USD=1000/-
• In case the balance falls below USD=1000/-, no profit will be paid.
• Withdrawal is allowable twice in a month and each withdrawal must not exceed ¼ of the credit balance. Withdrawal exceeding the said limit will require 7 days notice.
• Balance will carry profit only if it remains for one month or above.
• Profit will be on average monthly balance.
• Islami Bank Bangladesh Limited will try to invest such funds profitably in Foreign Investment as per Islami Shariah through their Foreign Correspondent Banks.
• Minimum 65% of the gross investment income derived from Mudaraba Foreign Currency Deposit (MFCD) funds, shall be distributed to this account-holders on half yearly basis.
• If there will be no available opportunity for Foreign Investment as per Shariah, Profit will not be given to the account holders.
• Foreign Currency (Current) Account may be opened with any Authorised Dealer (AD) Branch of the Bank. But for availing the facility of profit, the MFCD Account should be maintained with under-mentioned A/D branches of the Bank.
• Related Account opening form duly filled in alongwith Specimen Signature Card and signed by the account-holder.
• In case of nomination, Signature of the nominee in the account opening form and Signature Card be attested by the account-holder.
• Photocopy of passport (upto VISA pages).
• Passport-size photographs 2 copies.
• Nominee’s Photographs 2 copies (if there be any) duly attested by the account holder.
• Service contract/selection letter/Appointment letter/VISA and other relevant papers regarding occupation.

Procedure/Requirement for opening of MFCD A/c

Mudaraba Waqf Cash Deposit Account

Cash Waqf is the latest product in the realm of our banking sector particularly in Islamic economics and finance and it provides a unique opportunity for making investment in different religious, educational and social services. It has been decided to introduce a new deposit scheme/product in the name of ‘Mudaraba Waqf Cash Deposit Account MWCDA, through which savings made from earnings for the purpose of Waqf by the well-off and the rich people of the society can be mobilized and the income to be generated there from may be spent for different benevolent purposes. Through the Scheme the Bank will be able to contribute to popularize the role of Waqf in the country including Cash Waqf which will be instrumental in transferring savings of the rich to the deprived member of the public, in financing various religious, educational and social services in Bangladesh. Cash Waqf can work as supplement to the financing of various social investment projects.

Objectives

• To provide banking services as facilitator to create Cash Waqf and to assist in the overall management of Waqf

• To assist mobilization of social savings by creating Cash Waqf with a view to commemorating alive or deceased parents, children and to strengthen the integration of the family relationship of the well-off people and the rich.

• To increase social investment and to transform the social savings into capital.

• To benefit the general public, especially the poor sections of the people out of the resources of the rich.

• To create awareness among the rich regarding their social responsibilities to the society.

• To assist in developing capital market.

+ To assist in overall development efforts of the country and to make a unique integration of social security and social peace.

Term

Waqf to be done in perpetuity and the account shall be opened

in the title to be decided by the Waquif.

Ceiling of Deposit

Deposits/Cash will be received as endowment on Mudaraba principle. The Bank will manage the Waqf Fund on behalf of the Waquif. Waquif will have the right/opportunities to create Cash Waqf at a time or he/she may start with a minimum deposit of Tk. 50,000/- ( Taka fifty thousand) only and the subsequent deposit shall also be made in thousand or in multiple of thousand taka. If necessary, foreign currency may be accepted on complying with relevant rules/formalities. Cash Waqf shall be accepted in specified Endowment Receipt Voucher and a certificate for the entire amount shall be issued as and when the declared amount is built up in full.

Profit Sharing & Weightage

• The Waquif himself may be the beneficiary of a nominal portion of the profit to be earned from the Waqf Fund.

• The Waquif or the beneficiary under this Scheme shall get the share of minimum 65% of the investment income or the percentage the Bank decides from time to time derived from the deployment of all categories of Mudaraba fund in the investment during any accounting year according to their proportion applying the highest rate of weightage (1.35 at present stage)

• The Waqf amount may not remain intact as the Fund is operated as per Mudaraba principle. As per Mudaraba principle if any loss is incurred in course of business the loss is to be covered to the debit of the Waqf deposit. To be mentioned that the profit amount only will be spent for the purpose(s) specified by the Waquif. Unspent profit amount will automatically be added to Waqf amount and earn profit to grow over the time.

• Profit under this Scheme shall be payable to the respective sector(s)! institution(s)/project (s)/person(s) determined by the Waquif on Annual basis i.e. after declaration of final rate of profit of the Bank.

Opening of the Account

• Any bonafide adult citizen of Bangladesh with sound mind (capable to enter into contract) may open this Account with any of the Branches of the Bank.

• Account under the Mudaraba Waqf Cash Deposit Account shall only be opened in the title selected by the Waquif.

• The applicant shall have to be introduced by a bonafide Account holder of the Branch where he/she intends to open this Account or any client of any Branch of the Bank. or any respectable person known to the Bank may also introduce the Waquif.

• 2 (two) passport size photographs of the Waquif will be required to open this Account.

• No Cheque Book shall be issued against this Account.

• If the address of the Waquifs is/are changed that must be informed to the Bank immediately.

Deposit of Installment

• Waquif will have the right to create Cash Waqf at a time or he/she may start with a minimum deposit of Tk.50,000/- (Taka fifty thousand) only and the subsequent deposit shall be made by installment(s) in thousand taka or in multiple of thousand taka. In that case he/she will be given Endowment.

Receipt Voucher against depositing of every installment. But Waqf Certificate shall be issued at a time after depositing the full Waqf Amount.

• Installment may also be deposited by cheque. In such case, proceeds against the cheque will be deposited after collection. If the cheque is dishonored then the cheque shall be returned to the Waquif observing due formalities and the installment shall be treated overdue.

Mudaraba Muhor Savings Deposit Scheme

Savings play an important role in capital formation, income-generation and creation of employment opportunities and contribute towards the increase in wealth of the individual and nation through profitable investment. The people generally try to save a portion of their income with a view to protecting themselves from future financial hardship and also to enhance their earnings for their own benefit and the benefit of their family and the nation as a whole

The people of Bangladesh are deeply religious and committed to Islamic way of life and determined to conduct their economic activities in accordance with the tenets of Islamic Shariah. Islami Bank Bangladesh Limited, has therefore, introduced the savings deposit accounts viz. Mudaraba Savings Account, Mudaraba Term Deposit Account, Mudaraba Hajj Savings Account, Mudaraba Savings Bond, Mudaraba Special Savings (Pension) Scheme Mudaraba Monthly Profit Deposit Account, Mudaraba Foreign Currency Deposit (Savings) Account, Mudaraba Special Notice Account and Mudaraba Special Notice Account as per Islamic Shariah.

Islami Bank Bangladesh Limited, being encouraged by the success of the Mudaraba deposit accounts has, therefore, introduced yet another savings scheme namely ‘Mudaraba Muhor Savings Scheme’

Muhor is wealth, which a husband is to pay his wife, upon marriage. As per Islamic shariah, it is compulsory for husband to pay this to his wife. But there is a good number of married men from all walks of life in our society who did not pay total Muhor to their wives. Many of them are not aware about the necessity of payment of the deferred amount of Muhor so that wives have been remaining deprived of their fundamental right of Muhor. The wives are to forgive even the claim of the same. Although some of them are aware about it but they are not getting much opportunity to realize it from their husbands.

Eligibility

This Scheme has been designed for all classes of people married particularly the professionals & service holders creating an opportunity for them to save in monthly instalments according to their capability for rectifying their marriage life and to protect the human right of the women.

Objectives:

• To help the people raising awareness about Muhor, a basic Islamic principle.
• To help the women protecting their basic rights determined by Allah.

Term:

The scheme may be of 2(two) different terms:

• 5 years
• 10 years

Amount of Deposit Installments:

Accounts under this Scheme may be opened for monthly deposits of Tk.500/-, Tk1,000/-Tk.2,000/-, Tk.3,000/-,Tk.4,000/- and Tk.5,000/- only. The deposit will be received on Mudaraba principle.

Savings Deposit

Benefits(Condition Apply)

 Interest rate of 6.00% on minimum monthly balance.

 Minimum balance Tk.1000.

 Maintenance charge yealy Tk. 400.

 No hidden costs.

 Standing Instruction Arrangement are available for operating account.

Account Opening

 2 copies of recent photograph of account holder.

 Nominee’s Photograph.

 Valid photocopy of Voter ID Card.

Short Term Deposit

National Bank Limited offers interest on customer’s short term savings and gives facility to withdraw money any time.

Benefits (Condition Apply)

 Minimum balance Tk. 2000.

 Minimum maintenance charge yearly Tk. 800.

 Standing Instruction Arrangement are available for operating account.

Account Opening

 2 copies of recent photograph of account holder.

 Nominee’s Photograph.

 Valid photocopy of Voter ID Card.

Current Deposit

National Bank Limited offers customers current deposit facility for day-to-day business transcaction without any restriction.

Benefits (Condition Apply)

 Minimum balance Tk.2000.

 Minimum maintenance charge yearly Tk. 800.

 No hidden costs.

 Standing Instruction Arrangement are available for operating account.

 Easy access to our other facilities.

Account Opening

 2 copies of recent photograph of account holder.

 TIN certificate.

 Nominee’s Photograph.

 Valid photocopy of Voter ID Card.

Fixed term deposit

National Bank Limited offers fixed term savings that will scale up your savings amount wtih the time.

Benefits (Condition Apply)

 Any amount can be deposited.

 Premature encashment facility is available.

 Overdraft facility available against term receipt.

Account Opening

 1 copy of recent photograph of account holder.

 Nominee’s Photograph.

Monthly Savings Account

National Bank Limited offers monthly savings scheme for it’s retail customers.

Benefits (Condition Apply)

 Monthly installments of deposit will be Tk.500/-, Tk.1,000/- , Tk.2,000/- ,Tk.3,000, Tk.4000/- , Tk.5,000/- and Tk. 10,0000

 Account may be opened for any installment and term , which is not changeble.

 A person is allowed to open more than one account for different installment in a Branch/ Bank.

Account Opening

 1 copy of your recent photograph.

 Nominee’s Photograph.

RFC Account

National Bank Limited gives oppotunity to maintain foreign currency account thorugh it’s Authorized Delear Branches.Bangladesh nationals residing abroad or Foreign nationals residing abroad or Bangladesh and foreign firms operating in Bangladesh or abroad or Foreign missions and their expatriate employees

Benefits (Condition Apply)

 No initial deposit is required to open the account.

 Interest will be offered 1.75% for US Dollar Account , 3.00 % for EURO Account and 3.25% for GBP Account.

 They will get interest on daily product basis on the credit balance (minimum balance of US$ 1,000/- or GBP 500/- at least for 30 days) maintaining in the account.

Account Opening

 2 copies of recent photograph of account holder.

 Nominee’s Photograph.

 Passport Copy.

 ID of residence in abroad.

NFC Account

National Bank Limited gives opportunity to maintain foreign currency account thorugh it’s Authorized Delear Branches. All non – resident Bangladeshi nationals and persons of Bangladesh origin including those having dual nationality and ordinarily residing abroad may maintain interest bearing NFCD Account.

Benefits (Condition Apply)

 NFCD Account can be opened for One month, Three months, Six months and One Year through US Dollar, Pound Starling, Japanese Yen and Euro.

  The initial minimum amount of $1000 or 500 Pound Starling or equivalent other designated currency.

 Interest is paid on the balance maintain in the Account. This interest is tax free in Bangladesh.

Account Opening

 2 copies of recent photograph of account holder.

 Nominee’s Photograph.

 Passport Copy.

 ID of residence in abroad.

Investment Accounts

Overdraft

NBL offers overdraft facility for corporate customers for day-to day business operations .

Benefits (Condition Apply)

 Low charges in overdraft account maintenance.

 Facility is available against deposit receipt or mortgage property.

 Low interest rate 13-16%.

Account Opening

 Inroductory current account .

 Others necessary documents as per loan requirement.

Lease Finance

National Bank Limited offers leasing facility for clients with easy installment facility.

Financing Area

 Capital machinary.

 Different equipments.

 Gas, Diesel generator and Power plant.

 Medical equipments.

 Lift or elevator.

 Inroformantion Technology equipments.

 Construction equipments.

 Consumer durables.

Benefits (Condition Apply)

 Competitive monthly rental.

 Tax benefit.

 Fast processing.

 Easy handover after leasing period.

Home Loan

NBL offers home loan facility for purchasing flats or construction of house .

Benefits (Condition Apply)

 Financing amount extends upto 70% or Tk. 75,00,000 which is highest of total consturction cost.

 Grace period avilable upto 9 months in flat purchase or 12 months in consturction.

 Competitive interest rate.

 No application or processing fee.

Eligibility

Any bangladeshi citizen or NRB, who is capable of repayment can apply for this loan.

SME Loan

NBL offers financial support to small businessmen/enterprise with new products named “Festival Small Business Loan” and “NBL Small Business Loan” has been introduced in the Bank.

Benefits (Condition Apply)

 Maximum Tk.3.00 lac (Festival Scheme) and Maximum Tk.5.00 lac (Small Business Scheme) .

 3 Months (Festival Scheme) and 5 years (including 1 month grace period (Small Business Scheme))

 Collateral Free Advance.

Eligibility

Any genuine and small businessmen/ entrepreneurs/enterprise having honesty, sincerity, and integrity

Consumer Credit

 NBL offers consumer credit facility for retail customers.

Financing items

 Electornics consumer products.

 Computer or Computer acessories.

Benefits (Condition Apply)

 Fast processing.

 Competitive interest rate.

 No application or processing fee.

 Easy monthly installment.

Trade Finance

NBL provides comprehensive banking services to all. types of commercial concerns such as in the industrial sector for export-import purpose as working capital, packing credit, trade finance,Issuance of Import L/Cs,Advising and confirming Export L/Cs. – Bonds and Guarantees .

Benefits (Condition Apply)

 Low interest rate 13.00%-14.50%.

 Minimum processing time.

 Low service charges.

Investment Products

Bai- Muajjal   

Bai-Muajjal may be defined as a contract between a buyer and a seller under which the seller sells certain specific goods (permissible under Islamic Shariah and the Law of the country), to the buyer at an agreed fixed price payable at a certain fixed future date in lump-sum or within a fixed period by fixed installments. The seller may also sell the goods purchased by him as per order and specification of the buyer

Meaning

The terms ” Bai ”  and ” Muajjal ”   have been derived from Arabic words ﻊﻴﺒ  and ﻝﺟﺍ . The word  ﻊﻴﺒ  means purchase and sale and the word  ﻝﺟﺍ  means a fixed time or a fixed period. ” Bai-Muajjal ”  means sale for which payment is made at a future fixed date or within a fixed period. In short, it is a sale on Credit.

Definition

Bai-Muajjal may be defined as a contract between a Buyer and a Seller under which the Seller sells certain specific goods (permissible under Shariah and Law of the Country), to the Buyer at an agreed fixed price payable at a certain fixed future date in lump sum  or  within a fixed period by fixed installments. The seller may also sell the goods purchased by him as per order and specification of the Buyer.

In this Bank, Bai-Muajjal is treated as a contract between the Bank and the Client under which the Bank sells to the Client certain specified goods, purchased as per order and specification of the Client at an agreed price payable within a fixed future date in lump sum or by fixed installments.

Thus it is a Credit sale of goods by which ownership of the goods is transferred by the Bank to the Client but the payment of sale price by the Client is deferred for a fixed period.

It may be noted here that in  case of  Bai-Muajjal and Bai-Murabaha, the Islamic Bank is a financier to the Client not in the sense that the Bank finances  the purchase of goods by the Client, rather it is a financier by deferring the receipt of  the sale price of goods, it sells to the Client. If the Bank does not purchase the goods or does not make any purchase agreement with seller, but only makes payment of any goods directly purchased and received by the Client from the seller under Bai-Muajjal / Bai-Murabaha Agreement, that will be  a remittance/payment of the amount on behalf of the Client, which shall be nothing but a loan to the Client and any profit on this amount shall be nothing but Interest.

Therefore, purchase of goods by the Bank should be for and on behalf of the Bank and the payment of price of goods by the Bank must be made for and on behalf of the Bank. If in any way the  payment of price of goods is turned into a payment for and on behalf of the Client or it is paid to the Client  any profit on it will be Riba.

Important Features

•  It is permissible for the Client to offer an order to purchase by the Bank particular goods deciding its specification and committing himself to buy the same from the Bank on Bai-Muajjal i.e. deferred payment sale at fixed price.
• It is permissible to make the promise binding upon the Client to purchase from the Bank, that is, he is to either satisfy the promise or to indemnify the damages caused by breaking the promise without excuse.
• It is permissible to take cash / collateral security to Guarantee the implementation of the promise or to indemnify the damages.
• It is also permissible to document the debt resulting from Bai-Muajjal by a Guarantor, or a mortgage. or both like any other debt. Mortgage / Guarantee / Cash security may be obtained prior to the signing of the Agreement or at the time of signing the Agreement.
• Stock and availability of goods is a basic condition for signing  a  Bai-Muajjal Agreement, Therefore, the Bank must purchase the goods as per specification of the Client to acquire ownership of the same before signing the Bai-Muajjal Agreement with the Client.
• After purchase of goods  the Bank must bear the risk of goods until those are actually delivered to the Client.
• The Bank must deliver the specified Goods to the Client on specified date and at specified place of delivery as per Contract.
• The Bank may sell the goods at a higher price than the purchase price to earn profit.
• The price once fixed as per agreement and deferred can not be further increased
  The Bank may sell the goods at one agreed price which will include both the cost price and the profit. Unlike Bai-Murabaha, the Bank may not disclose the cost price and the profit mark-up separately to the Client.

Bai- Murabaha  

Bai-Murabaha may be defined as a contract between a buyer and a seller under which the seller sells certain specific goods (permissible under Islamic Shariah and the Law of the land), to the buyer at a cost plus agreed profit payable in cash or on any fixed future date in lump-sum or by installments. The profit marked-up may be fixed in lump-sum or in percentage of the cost price of the goods.

Meaning

The terms “Bai-Murabaha” have been derived from Arabic words  ﺢﻳﺑ  and  ﺢﺑﺭ  (Bai and Ribhun). The word  ﺢﻳﺑ  means purchase and sale and the word  ﺢﺑﺭ  means an agreed upon profit. ﺢﺑﺍﺭﻣﺍ  ﺢﻳﺑ  ” Bai-Murabaha” means sale on agreed upon profit.

 Definition

Bai-Murabaha may be defined as a contract between a Buyer and a Seller under which the Seller sells certain specific goods permissible under Islamic Shariah and the Law of the land to the Buyer at a cost plus agreed profit payable in cash or on any fixed future date in lump sum or by installments. The profit marked-up may be fixed in lump sum or in percentage of the cost price of the goods.

Types of Murabaha

In respect of dealing parties Bai-Murabaha may be of two types.

Ordinary Bai-Murabaha 

           If there are only two parties, the seller and the buyer, where the seller as an ordinary trader purchases the goods from the market without depending on any order and promise to buy the same from him and sells those to a buyer for cost plus profit, then the sale is called Ordinary Bai-Murabaha.

Bai-Murabaha on Order and Promise

If there are three parties, the buyer, the seller and the Bank as an intermediary trader between the buyer and the seller, where the Bank upon receipt of order from the buyer with specification and a prior outstanding promise to buy the goods from the Bank, purchases the ordered goods and sells those to the ordering buyer at a cost plus agreed profit, the sale is called “Bai-Murabaha on Order or Promise”, generally known as Murabaha.

This Murabaha upon order and promise is generally used by the Islami Banks, which undertake the purchase of commodities according to the specification requested by the Clients and sale on Bai-Murabaha to the one who ordered for the goods and promised to buy those for its cost price plus a marked-up profit agreed upon previously by the two parties, the Bank and the Client.

In this Bank, Bai-Murabaha is treated as a contract between the Bank and the Client under which the Bank purchases the specified goods as per order and specification of the Client and sells those to the ordering Client at a cost plus agreed upon profit payable within a fixed future date in lump sum or by fixed instalments

Thus it is a sale of goods on profit by which ownership of the goods is transferred by the Bank to the Client but the payment of the sale price (cost plus profit) by the Client is deferred for a fixed period.

It may be noted here that, in case of Bai-Muajjal and Bai-Murabaha, Islamic Bank is a financier to the Client not in the sense that the Bank finances the purchase of goods by the Client, rather it is a financier by deferring the receipt of sale price of the goods sold by the Bank to the Client.

 If the Bank does not purchase the goods or does not make any purchase agreement with seller, but only makes payment of any goods directly purchased and received by the Client from the seller under Bai-Muajjal/Bai-Murabaha Agreement, that will be a remittance of the amount on behalf of the Client, which shall be nothing but a loan to him and any profit on this amount shall be nothing but Interest (Riba).

Therefore, purchase of goods by the Bank should be for and on behalf of the Bank and the payment of price of goods by the Bank must be made for and on behalf of the Bank. If in any way the payment of price of goods is turned into a payment for and on behalf of the Client or it is paid to the Client any profit on it will be Riba.

Important Features

It is permissible for the Client to offer an order to purchase by the Bank particular goods deciding its specification and committing himself to buy the same from the Bank on Murabaha, i.e. cost plus agreed upon profit.

It is permissible to make the promise binding upon the Client to purchase from the Bank, that is, he is to either satisfy the promise or to indemnify the damages caused by breaking the promise without excuse.

It is permissible to take cash/collateral security to guarantee the implementation of the promise or to indemnify the damages.

It is also permissible to document the debt resulting from Bai-Murabaha by a Guarantor, or a mortgage, or both like any other debt.  Mortgage/ Guarantee/ Cash Security may be obtained prior to the signing of the Agreement or at the time of signing the Agreement.

Stock and availability of goods is a basic condition for signing a Bai-Murabaha Agreement. Therefore, the Bank must purchase the goods as per specification of the Client to acquire ownership of the same before signing the Bai-Murabaha agreement with the Client.

After purchase of goods the Bank must bear the risk of goods until those are actually sold and delivered to the Client, i.e., after purchase of the goods by the Bank and before selling of those on Bai-Murabaha to the Client buyer, the Bank shall bear the consequences of any damages or defects, unless there is an agreement with the Client releasing the Bank of the defects, that means, if the goods are damaged, Bank is liable, if the goods are defective, (a defect that is not included in the release) the Bank bears the responsibility.

The Bank must deliver the specified Goods to the Client on specified date and at specified place of delivery as per Contract.

The Bank shall sell the goods at a higher price (Cost + Profit) to earn profit. The cost of goods sold and profit mark-up therewith shall separately and clearly be mentioned in the Bai-Murabaha Agreement. The profit mark-up may be mentioned in lump sum or in percentage of the purchase/cost price of the goods. But, under no circumstances, the percentage of the profit shall have any relation with time or expressed in relation with time, such as per month, per annum etc

The price once fixed as per agreement and deferred cannot be further increased.

It is permissible for the Bank to authorize any third party to buy and receive the goods on Bank’s behalf. The authorization must be in a separate contract. 

Mudarabah

It is a form of partnership where one party provides the funds while the other provides the expertise and management. The first party is called the Sahib-Al-Maal and the latter is referred to as the Mudarib. Any profit accrued are shared between the two parties on a pre-agreed basis, while capital loss is exclusively borne by the partner providing the capital.

Musharaka

An Islamic financial technique that adopts “equity sharing” as a means of financing projects. Thus, it embraces different types of profit and loss sharing partnership. The partners (entrepreneurs, bankers, etc.) share both capital and management of a project so that profits will be distributed among them as per ratios, where loss is shared according to ratios of their equity participation.

 Bai- Salam

Under this mode Bank will execute purchase contract with the client and make payment against purchase of product, which is under process of production. Bai-Salam contract will be executed after making any investment showing price, quality, quantity, time, place and mode of delivery. The profit is to be negotiated. In this mode the payment as the price of the goods is made at the time of Agreement and the delivery of the goods is deferred.

Al-Wadeeah Current Account

·  The deposit is accepted in the AWCA under Al-wadeah principle of Islamic Shariah. The deposited money is invested along with other deposits by the Bank according to Islamic Shariah.  Here, the customer does not have any share in the profit.  The transaction can be made more than once during the banking hour.

  The account can only be opened with the introduction of any acceptable  client/ current account holder of the Bank. In order to open Al-wadeah Current Account, a minimum amount of Tk.500/= is to be deposited and   the minimum balance with minimum amount of Govt. tax is to be maintained in the account. The Bank reserves the authority to return cheque, if otherwise.

  Withdrawal may be made through the cheques supplied by the Bank. In that case all articles of Negotiable Instrument Act are applied. 

  Incidental charge @ Tk.50.00 half yearly basis is deducted from the account where minimum balance is not maintained. Closing charge @Tk.50.00 will be realised while closing the account 

  For the first cheque book, the customer has to apply   in a specified form (F-6) and then for new cheque book the customer shall have to apply through the requisition slip supplied with the previous cheque book.  

  The customer has to count the pages of the cheque book at the time of receiving the same. The book   should be maintained safely so that no cheque may be misused or stolen or destroyed. The Bank will not be responsible for any forgery if occurred by the stolen cheque (s).  

  The account holder shall have to use the specimen signature put in the Bank while withdraw money and in case of other correspondence with the Bank. In order to change the specimen signature put earlier the operator shall have to apply in writing before well in time.

  The bank usually allots separate A/c. Nos. to different A/c. holders. The depositors have to mention name and No. of the account while fill-up the deposit slips for depositing the cash/cheque and obtain receipt duly signed by the authorised bank officials. The cheque to be deposited should be marked ‘Crossed’ i.e. A/c. Payee/ & co. etc. in the proper place of the cheque. If the deposited cheque(s) etc. is/are returned unpaid to the bank, charge/commission will be realised as per norms.     

  The Bank records the instruction of ‘Stop Payment` with care. But the Bank will not be held responsible if any fraudulent withdrawal is/are made through stopped cheque (s). 

  The Bank supplies statement of account every month. 

  The bank has right to deduct any account to realise necessary expenditure/postal charge. Moreover, any tax imposed by the Govt. will be deducted from the account.
The Bank preserve the right to close the account without showing any cause. 

  The changed address (if applicable) should be informed to the Branch immediately. The bank makes correspondence with the customer through postal services. The Bank will not be held responsible if any letter (cheque/Bill) is not delivered in time or not delivered at all, ] 

  In case of joint account, if any of the A/c. holders expired the operation in the account will be stopped just after getting report and balance in that account will be paid as per norms to the heirs of the deceased and the alive A/c. holder(s); if there is any outstanding investment liabilities, the alive account holder/heirs of the deceased is/are bound to adjust the same.  

  The Bank consciously sums up the credit/debit of the account. If any amount is credited/debited through mistake, Bank can re-write the balance.  

  The unused cheque(s)   must be returned   to the Bank at the time of closing of the account. 

  The account holder(s) can select nominee’s) to receive the balance of the account in case of death of the account holder. 

  In case of death of the account holder, the nominee’s) has to submit the following papers/documents in support of his/their nomination to receive the balance of the concerned account:
a) Death Certificate regarding death of the account holder.

b)Certificate from 2 (two) valued clients of the Bank or 2 (two) officers of the Bank or the Chairman/Ward Commissioner of the Union Parishad/Municipality in support of the identification of the nominee’s).

c) Attested Passport size photographs of the nominee’s.

d) Indemnity Bond (C.F.-12) duly executed by the nominee’s) under sureties of 2 (two) valued clients each good for the amount and acceptable to the Bank.

  The Bank reserves the authority to change, develop or reform/modify the rules of the account any time and the client is bound to abide by the same.

Mudaraba Savings Account

Mudaraba Term Deposit Receipt

Mudaraba Special Notice Account

Mudaraba Special Savings (Pension) Account

Islami Bank Bangladesh Limited, in keeping with its welfare-oriented ideals based on Shariah Principles, has developed a deposit pension scheme named “Mudaraba Special Savings (Pension) Scheme”, in order to mobilise and encourage the middle and lower middle class professional and service holders to save as per their capacity for their old age when they will normally retire from their active service life who otherwise do not like to keep and invest their savings and funds in interest bearing deposit pension schemes. Due to lack of or limited scope for savings and investment in non-interest bearing schemes, most of these individuals either consume their savings/funds or spend the same in unproductive expenditures. Thus a substantial amount of Savings/funds remain out of the production cycle.

The savings/funds of these people can play a vital role in capital formation and as a source of invisible fund for generation of income and increase of wealth of the individuals and of the nation. The scheme developed by Islami Bank Bangladesh Ltd. has already been accepted cordially by the lower and middle income group of people and thus it is expected to have great prospect in mobilization of small savings and funds for deployment in income and employment generating activities and business. In view of the above the Bank has introduced “Mudaraba Special Savings (Pension) Scheme”.

Amount of deposit installments 

Accounts under this scheme may be opened for monthly deposits of Tk. 100/-, Tk. 200/-, Tk. 300/-, Tk. 400/-, Tk. 500/-, Tk. 1000/-, Tk. 1500/-, Tk. 2500/- and Tk. 5000/- only. The deposit will be received on Mudaraba Principle.

Mudaraba Hajj Savings Account

Hajj is one of the fundamental worship (Ibadah) of Islam. However, because of the prevailing socio-economic situation in the country, the people interested to perform Hajj cannot arrange the required amount of money at a time to perform Hajj. The desire of many to perform Hajj is thus never fulfilled. Over twenty five thousand devoted Muslims from Bangladesh perform holy Hajj every year. Financial solvency and physical fitness are the pre-requisites of performing Hajj. The majority of the people, however, reach the fag end of their life in arranging the required amount of money for Hajj. Islami Bank Bangladesh Limited has, therefore, introduced “Hajj Savings Scheme” so that persons eager to perform holy Hajj may build-up savings through ‘Mudaraba Hajj Savings Account’.

Salient Features

·         Mudaraba Hajj Savings Account can be opened in the name of the individual only.

·         Deposits in this account are received on the basis of Mudaraba principle of Islamic Shariah.

·         No photography is required to open this account.

·                     The Bank issues pass-book against this account. After the deposit of each instalment, the depositor must ensure that such deposit is recorded in the pass-book. If the pass-book is lost, the Bank shall charge Taka 10/- for issuance of new pass-book.

·                     The account holder must immediately communicate to the Bank of any change of the address.

·                     Persons eager to perform Hajj within the period of one to twenty five years may build-up savings to perform Hajj by depositing monthly instalment.

·                     The under mentioned chart indicates the year-wise monthly instalments of persons intend to perform Hajj in 2001, 2002 and 2003. The monthly instalment shall be applicable on the basis of opening year of the account.

·  Profit shall be disbursed over the deposit on the basis of daily balance by giving 1.10 weightage, which is more than that of 3 year term deposit.

·  If any depositor intends to perform Hajj before the maturity of deposit, then he can do so by depositing the balance amount fixed for the year alongwith his savings in the Mudaraba Hajj Savings Account.

·  If any depositor, for some reasons, is unable to perform Hajj and wants to withdraw the deposited money, he shall get profit over the deposit at the rate of profit applicable for Mudaraba Savings Account.

·  Mudaraba Hajj Savings Account can be transferred from one Branch to another upon application from the depositor on genuine ground.

·  Money can not be withdrawn from Mudaraba Hajj Savings Account and as such no cheque-book is issued.

·  In a year there shall be 12 instalments, 60 instalments in 5 years and 300 instalments in 25 years.

·  Regular instalment shall have to be deposited within first 10 days of the month. Advance deposit of investment is acceptable.

·  If any depositor fails to deposit 3 instalments consecutively then his Mudaraba Hajj Savings Account shall be void and such depositor shall get profit at the rate of profit given to Mudaraba Savings Account. But if the arear of one or two instalments are deposited alongwith the next regular instalment, the account shall remain operative. But if such irregular practice is repeated within the same year the account shall become void.

·  At the end of the period if the total deposited amount including profit becomes less than the actual expenditure for Hajj in that particular year then the depositor may perform Hajj by depositing the balance amount.

·  At the end of the period, if it appears that the actual expenditure for Hajj in that particular year is less than the deposited amount including profit, then the excess amount shall be refunded.

·  In case any depositor under Hajj Savings Scheme fails to perform Hajj in the year of maturity and desires to perform Hajj subsequently, he may be allowed the benefit of Hajj Savings Account up-to the date of maturity and for the subsequent period till performance of Hajj at Mudaraba Account rate of profit.

·  All categories of employees of Islami Bank Bangladesh Limited are eligible to participate in this Scheme.

·  The Bank, at any time, may modify, revise and cancel, amend and rescind any rule of this account and the depositor shall be bound to abide by them.

Mudaraba Savings Bond Scheme

Savings play an important role in capital formation, income-generation and creation of employment opportunities and contribute towards the increase in wealth of the individual and nation through profitable investment.

The people generally try to save a portion of their income with a view to protecting themselves from future financial hardship and also to enhance their earnings for their own benefit and the benefit of their family and the nation as a whole. Bangladeshi wage earners living abroad and the retired service holders desire to invest their earnings and retirement benefits in safe and profitable investment schemes. Many a people, however, cannot deploy their fund in business for various reasons. The people of Bangladesh are deeply religious and committed to Islamic way of life and determined to conduct their economic activities in accordance with the tenets of Islamic Shariah. Naturally they want to avoid interest in transaction and business which is forbidden by Islam.

Islam encourages savings, which is the prerequisite for any sustainable economic development. The saying of Holy Prophet (PBUH) is that poverty leads to unbelief and therefore, people have been encouraged to save a portion of their earnings to protect themselves from future financial setback. Islam emphasises in the cycling of surplus capital by investing such funds in productive economic activities that will pave the way for employment, development and progress.

The people of Bangladesh reluctantly invest in interest bearing schemes. The religious Muslims, however, avoid such investments and the idle funds are mostly being consumed to meet the avoidable family demands. Thus the major portion of savings remain out of the production process. Islami Bank Bangladesh Limited, has therefore, introduced the savings deposit accounts viz. Mudaraba Savings Account, Mudaraba Term Deposit Account, Mudaraba Hajj Savings Account, Mudaraba Special Notice Account and Mudaraba Special Savings (Pension) Scheme as per Islamic Shariah. Mudarabah Special Savings (Pension) Account has also been introduced recently. Islami Bank Bangladesh Limited, being encouraged by the success of the Mudaraba deposit accounts has, therefore, introduced yet another savings scheme namely “Mudaraba Savings Bond Scheme”.

Objectives

·         To offer investment opportunity to the people and institutions who do not like to keep their savings and funds in interest bearing deposit accounts or invest in interest bearing schemes.

·         To facilitate deposit and investment of funds of the wage earners and retirement benefits of the service holders.

·         To encourage savings by offering a safe and profitable investment outlet through sharing of a portion of the profit out of investment of their deposited money as per Islamic Shariah.

·         To extend the Bank’s Schemes for mobilisation of savings, generation of income, creation of employment and enhancement of wealth of the individual and the nation through profitable investment of these savings as per Islamic Shariah.

·         To encourage participation of the people in Islamic banking system and development of the economy in line with the principle of Islamic Shariah.

  Eligibility

·         Person(s) aged 18 years and above shall be eligible to purchase Mudaraba Savings Bond(s) in single name or in joint names.

·         Educational Institutions, Clubs, Associations and other non-trading and non-profit Socio-economic Institutions shall also be eligible to purchase Bond(s) in the name of the Institutions.

·         Guardian(s) shall be allowed to purchase Bond(s) jointly with a minor mentioning the age of the minor. Payment against such Bond(s) shall be made on the basis of joint signature after the minor attains majority.

·         Father/Mother/Legal Guardian shall be eligible to purchase these Bonds on behalf of one or two minors mentioning the name and age of the minor(s) and also instructions regarding payment encashment.

Denomination

Mudaraba Savings Bond shall be available in Tk. 1,000.00, Tk. 5,000.00, Tk. 10,000.00, Tk. 25,000.00, Tk. 50,000.00, Tk. 1,00,000.00, Tk. 5,00,000.00 and Tk. 10,00,000.00 denominations.

Purchase Ceiling

Purchase ceiling of Mudaraba Savings Bond is minimum Tk. 1,000.00. Any amount of Bonds can be purchased subject to availability.

Purchase Procedure

Eligible purchaser(s) shall be entitled to purchase Mudaraba Savings Bonds in single or in joint names or in the name of Institutions from the Branch of the Bank. The purchaser(s) shall have to apply in prescribed form of the Bank and fulfil the terms and conditions in this respect.

Period of Maturity

        5 (five) years
8 (eight) years.

Profit Sharing & Weightage

The Bondholders shall share income derived from investment i.e. income from the use of the funds in economic activities permitted by Islamic Shariah. This includes profit, dividend, capital gains, rent and any other income derived from investment
Bondholders shall get minimum 65% of the income derived from the deployment of Mudaraba fund in the investment during any accounting year according to their proportion in the total investment applying the following weightages:

Type of Bonds                                                                        Weightage

8 years Mudaraba Savings Bond          :                                       1.25
5 years Mudaraba Savings Bond          :                                       1.10

Encashment

For encashment of Mudaraba Savings Bonds, the Bondholder(s) or their nominee(s) [in case of death of the purchaser(s)] shall have to present the Bond(s) and the related papers in original duly discharged as per rules, to the Branch of the Bank where from the Bonds were purchased. The concerned Branch shall verify the signatures and other particulars and if found in order, then make payment with profit to be calculated on the basis of period covered at the time of encashment.

Other Benefits

·         Mudaraba Savings Bonds can be purchased in single name or joint names and there shall be provisions for nominating nominee(s).

·         Photographs shall not be required with application for purchase of the Bonds.

·         Mudaraba Savings Bond shall be acceptable as security.

·         If original Bonds are lost or damaged due to theft, fire etc. there shall be arrangement for issuance of duplicate Bonds after due verification.

·         Mudaraba Savings Bond holders alongwith other Mudaraba depositors shall get preference in the matter of investment of their deposits over the Bank’s equity and other cost free funds.

·         Income derived from the investments during the accounting year shall at first be allocated to the Mudaraba deposits and cost free funds (including Bank’s equity) according to their proportion in the total investment as per principles of distribution of profit to Mudaraba depositors.

Mudaraba Foreign Currency Deposit Scheme (Savings)

Islami Bank Bangladesh Limited has introduced a new deposit product titled ‘Mudaraba Foreign Currency Deposit Scheme (Savings)’ under Mudaraba principle and endeavouring to invest the foreign currency funds in profitable way through its Foreign Correspondent Banks under Shariah Principle so as to enable the Bank to pay profit to its FC/PFC depositors, who will intend to open/maintain Mudaraba Foreign Currency Deposit (MFCD) Account particularly in US Dollar. This Scheme offers investment opportunities to wage earners and other private Foreign Currency Account holders who do not like to keep their funds in interest bearing deposit accounts or invest in interest bearing schemes. To encourage savings in Foreign Currency by offering a safe and profitable opportunity to the savers/investors by way of sharing a portion of the profit out of the investment of their funds as per principles of Shariah and to extend the Banks Deposit Scheme for mobilisation of remittance of Bangladeshi expatriates to increase the opportunity for their income generation and increase in the wealth of individuals and of the nation through profitable investment as per Shariah principles are the special features of the Scheme.

Objectives

·         To offer investment opportunity to the Wage Earners and other private Foreign Currency account holders who do not like to keep their funds in interest bearing deposit accounts or invest in interest bearing schemes.

·         To encourage savings in Foreign Currency by offering a safe and profitable opportunity to the savers/investors by way of sharing a portion of the profit out of the investment of their funds as per principles of Shariah.

·         To extend the Bank’s Deposit Scheme for mobilization of remittance of Bangladeshi expatriates to increase the opportunity for their income generation and increase in the wealth of individual and of the nation through profitable investment as per Islamic Shariah Principles.

Eligibility of the Persons/Firms for opening MFCD A/c(s)

1.   Bangladeshi nationals residing, working and earning abroad.

2.                  Foreign nationals residing in Bangladesh and also Foreign Firms registered abroad and operating in Bangladesh.

3.   Foreign missions and their expatriate employees.

Opening of the Account (Currency, Type and withdrawal)

1.                  Account may be opened in US Dollar, Pound Sterling or other eligible currencies at the option of the account-holder (However, at the moment Deposit in such account will be accepted only in US. Dollar).

2.   Types of account will be “Mudaraba Foreign Currency Deposit Account”.

Payment of Profit

·                     Initial Deposit must be USD=1000/-

·                     In case the balance falls below USD=1000/-, no profit will be paid.

·                     Withdrawal is allowable twice in a month and each withdrawal must not exceed ¼ of the credit balance. Withdrawal exceeding the said limit will require 7 days notice.

·                     Balance will carry profit only if it remains for one month or above.

·                     Profit will be on average monthly balance.

·                     Islami Bank Bangladesh Limited will try to invest such funds profitably in Foreign Investment as per Islami Shariah through their Foreign Correspondent Banks.

·                     Minimum 65% of the gross investment income derived from Mudaraba Foreign Currency Deposit (MFCD) funds, shall be distributed to this account-holders on half yearly basis.

·                     If there will be no available opportunity for Foreign Investment as per Shariah, Profit will not be given to the account holders.

Procedure/Requirement for opening of MFCD A/c

·                     Foreign Currency (Current) Account may be opened with any Authorised Dealer (AD) Branch of the Bank. But for availing the facility of profit, the MFCD Account should be maintained with under-mentioned A/D branches of the Bank.

·                     Related Account opening form duly filled in alongwith Specimen Signature Card and signed by the account-holder.

·                     In case of nomination, Signature of the nominee in the account opening form and Signature Card be attested by the account-holder.

·                     Photocopy of passport (upto VISA pages).

·                     Passport-size photographs 2 copies.

·                     Nominee’s Photographs 2 copies (if there be any) duly attested by the account holder.

·                     Service contract/selection letter/Appointment letter/VISA and other relevant papers regarding occupation.

Mudaraba Waqf Cash Deposit Account

Cash Waqf is the latest product in the realm of our banking sector particularly in Islamic economics and finance and it provides a unique opportunity for making investment in different religious, educational and social services. It has been decided to introduce a new deposit scheme/product in the name of ‘Mudaraba Waqf Cash Deposit Account MWCDA, through which savings made from earnings for the purpose of Waqf by the well-off and the rich people of the society can be mobilized and the income to be generated there from may be spent for different benevolent purposes. Through the Scheme the Bank will be able to contribute to popularize the role of Waqf in the country including Cash Waqf which will be instrumental in transferring savings of the rich to the deprived member of the public, in financing various religious, educational and social services in Bangladesh. Cash Waqf can work as supplement to the financing of various social investment projects.

Objectives

• To provide banking services as facilitator to create Cash Waqf and to assist in the overall management of Waqf

• To assist mobilization of social savings by creating Cash Waqf with a view to commemorating alive or deceased parents, children and to strengthen the integration of the family relationship of the well-off people and the rich.

• To increase social investment and to transform the social savings into capital.

• To benefit the general public, especially the poor sections of the people out of the resources of the rich.

• To create awareness among the rich regarding their social responsibilities to the society.

• To assist in developing capital market.

+ To assist in overall development efforts of the country and to make a unique integration of social security and social peace.

Term

Waqf to be done in perpetuity and the account shall be opened

in the title to be decided by the Waquif.

Ceiling of Deposit

Deposits/Cash will be received as endowment on Mudaraba principle. The Bank will manage the Waqf Fund on behalf of the Waquif. Waquif will have the right/opportunities to create Cash Waqf at a time or he/she may start with a minimum deposit of Tk. 50,000/- ( Taka fifty thousand) only and the subsequent deposit shall also be made in thousand or in multiple of thousand taka. If necessary, foreign currency may be accepted on complying with relevant rules/formalities. Cash Waqf shall be accepted in specified Endowment Receipt Voucher and a certificate for the entire amount shall be issued as and when the declared amount is built up in full.

Profit Sharing & Weightage

• The Waquif himself may be the beneficiary of a nominal portion of the profit to be earned from the Waqf Fund.

• The Waquif or the beneficiary under this Scheme shall get the share of minimum 65% of the investment income or the percentage the Bank decides from time to time derived from the deployment of all categories of Mudaraba fund in the investment during any accounting year according to their proportion applying the highest rate of weightage (1.35 at present stage)

• The Waqf amount may not remain intact as the Fund is operated as per Mudaraba principle. As per Mudaraba principle if any loss is incurred in course of business the loss is to be covered to the debit of the Waqf deposit. To be mentioned that the profit amount only will be spent for the purpose(s) specified by the Waquif. Unspent profit amount will automatically be added to Waqf amount and earn profit to grow over the time.

• Profit under this Scheme shall be payable to the respective sector(s)! institution(s)/project (s)/person(s) determined by the Waquif on Annual basis i.e. after declaration of final rate of profit of the Bank.

Opening of the Account

• Any bonafide adult citizen of Bangladesh with sound mind (capable to enter into contract) may open this Account with any of the Branches of the Bank.

• Account under the Mudaraba Waqf Cash Deposit Account shall only be opened in the title selected by the Waquif.

• The applicant shall have to be introduced by a bonafide Account holder of the Branch where he/she intends to open this Account or any client of any Branch of the Bank. or any respectable person known to the Bank may also introduce the Waquif.

• 2 (two) passport size photographs of the Waquif will be required to open this Account.

• No Cheque Book shall be issued against this Account.

• If the address of the Waquifs is/are changed that must be informed to the Bank immediately.

Deposit of Installment

• Waquif will have the right to create Cash Waqf at a time or he/she may start with a minimum deposit of Tk.50,000/- (Taka fifty thousand) only and the subsequent deposit shall be made by installment(s) in thousand taka or in multiple of thousand taka. In that case he/she will be given Endowment.

Receipt Voucher against depositing of every installment. But Waqf Certificate shall be issued at a time after depositing the full Waqf Amount.

• Installment may also be deposited by cheque. In such case, proceeds against the cheque will be deposited after collection. If the cheque is dishonored then the cheque shall be returned to the Waquif observing due formalities and the installment shall be treated overdue.

Mudaraba Muhor Savings Deposit Scheme

Savings play an important role in capital formation, income-generation and creation of employment opportunities and contribute towards the increase in wealth of the individual and nation through profitable investment. The people generally try to save a portion of their income with a view to protecting themselves from future financial hardship and also to enhance their earnings for their own benefit and the benefit of their family and the nation as a whole.

The people of Bangladesh are deeply religious and committed to Islamic way of life and determined to conduct their economic activities in accordance with the tenets of Islamic Shariah. Islami Bank Bangladesh Limited, has therefore, introduced the savings deposit accounts viz. Mudaraba Savings Account, Mudaraba Term Deposit Account, Mudaraba Hajj Savings Account, Mudaraba Savings Bond, Mudaraba Special Savings (Pension) Scheme Mudaraba Monthly Profit Deposit Account, Mudaraba Foreign Currency Deposit (Savings) Account, Mudaraba Special Notice Account and Mudaraba Special Notice Account as per Islamic Shariah.

Islami Bank Bangladesh Limited, being encouraged by the success of the Mudaraba deposit accounts has, therefore, introduced yet another savings scheme namely ‘Mudaraba Muhor Savings Scheme’.

Muhor is wealth, which a husband is to pay his wife, upon marriage. As per Islamic shariah, it is compulsory for husband to pay this to his wife. But there is a good number of married men from all walks of life in our society who did not pay total Muhor to their wives. Many of them are not aware about the necessity of payment of the deferred amount of Muhor so that wives have been remaining deprived of their fundamental right of Muhor. The wives are to forgive even the claim of the same. Although some of them are aware about it but they are not getting much opportunity to realize it from their husbands.

Eligibility

This Scheme has been designed for all classes of people married particularly the professionals & service holders creating an opportunity for them to save in monthly instalments according to their capability for rectifying their marriage life and to protect the human right of the women.

Objectives:

·                     To help the people raising awareness about Muhor, a basic Islamic principle.

·                     To help the women protecting their basic rights determined by Allah.

Term:

The scheme may be of 2(two) different terms:

·         5 years

·         10 years

Amount of Deposit Installments:

Accounts under this Scheme may be opened for monthly deposits of Tk.500/-, Tk1,000/-Tk.2,000/-, Tk.3,000/-,Tk.4,000/- and Tk.5,000/- only. The deposit will be received on Mudaraba principle.

Savings Deposit

Benefits(Condition Apply)

 Interest rate of 6.00% on minimum monthly balance.

 Minimum balance Tk.1000.

 Maintenance charge yealy Tk. 400.

 No hidden costs.

 Standing Instruction Arrangement are available for operating account.

Account Opening

 2 copies of recent photograph of account holder.

 Nominee’s Photograph.

 Valid photocopy of Voter ID Card.

Short Term Deposit

National Bank Limited offers interest on customer’s short term savings and gives facility to withdraw money any time.

Benefits (Condition Apply)

 Minimum balance Tk. 2000.

 Minimum maintenance charge yearly Tk. 800.

 Standing Instruction Arrangement are available for operating account.

Account Opening

 2 copies of recent photograph of account holder.

 Nominee’s Photograph.

 Valid photocopy of Voter ID Card.

Current Deposit

National Bank Limited offers customers current deposit facility for day-to-day business transcaction without any restriction.

Benefits (Condition Apply)

 Minimum balance Tk.2000.

 Minimum maintenance charge yearly Tk. 800.

 No hidden costs.

 Standing Instruction Arrangement are available for operating account.

 Easy access to our other facilities.

Account Opening

 2 copies of recent photograph of account holder.

 TIN certificate.

 Nominee’s Photograph.

 Valid photocopy of Voter ID Card.

Fixed term deposit

National Bank Limited offers fixed term savings that will scale up your savings amount wtih the time.

Benefits (Condition Apply)

 Any amount can be deposited.

 Premature encashment facility is available.

 Overdraft facility available against term receipt.

Account Opening

 1 copy of recent photograph of account holder.

 Nominee’s Photograph.

Monthly Savings Account

National Bank Limited offers monthly savings scheme for it’s retail customers.

Benefits (Condition Apply)

 Monthly installments of deposit will be Tk.500/-, Tk.1,000/- , Tk.2,000/- ,Tk.3,000, Tk.4000/- , Tk.5,000/- and Tk. 10,0000

 Account may be opened for any installment and term , which is not changeble.

 A person is allowed to open more than one account for different installment in a Branch/ Bank.

Account Opening

 1 copy of your recent photograph.

 Nominee’s Photograph.

RFC Account

National Bank Limited gives oppotunity to maintain foreign currency account thorugh it’s Authorized Delear Branches.Bangladesh nationals residing abroad or Foreign nationals residing abroad or Bangladesh and foreign firms operating in Bangladesh or abroad or Foreign missions and their expatriate employees.

Benefits (Condition Apply)

 No initial deposit is required to open the account.

 Interest will be offered 1.75% for US Dollar Account , 3.00 % for EURO Account and 3.25% for GBP Account.

 They will get interest on daily product basis on the credit balance (minimum balance of US$ 1,000/- or GBP 500/- at least for 30 days) maintaining in the account.

Account Opening

 2 copies of recent photograph of account holder.

 Nominee’s Photograph.

 Passport Copy.

 ID of residence in abroad.

NFC Account

National Bank Limited gives opportunity to maintain foreign currency account thorugh it’s Authorized Delear Branches. All non – resident Bangladeshi nationals and persons of Bangladesh origin including those having dual nationality and ordinarily residing abroad may maintain interest bearing NFCD Account.

Benefits (Condition Apply)

 NFCD Account can be opened for One month, Three months, Six months and One Year through US Dollar, Pound Starling, Japanese Yen and Euro.

  The initial minimum amount of $1000 or 500 Pound Starling or equivalent other designated currency.

 Interest is paid on the balance maintain in the Account. This interest is tax free in Bangladesh.

Account Opening

 2 copies of recent photograph of account holder.

 Nominee’s Photograph.

 Passport Copy.

 ID of residence in abroad.

Investment Accounts

Overdraft

NBL offers overdraft facility for corporate customers for day-to day business operations .

Benefits (Condition Apply)

 Low charges in overdraft account maintenance.

 Facility is available against deposit receipt or mortgage property.

 Low interest rate 13-16%.

Account Opening

 Inroductory current account .

 Others necessary documents as per loan requirement.

Lease Finance

National Bank Limited offers leasing facility for clients with easy installment facility.

Financing Area

 Capital machinary.

 Different equipments.

 Gas, Diesel generator and Power plant.

 Medical equipments.

 Lift or elevator.

 Inroformantion Technology equipments.

 Construction equipments.

 Consumer durables.

Benefits (Condition Apply)

 Competitive monthly rental.

 Tax benefit.

 Fast processing.

 Easy handover after leasing period.

Home Loan

NBL offers home loan facility for purchasing flats or construction of house .

Benefits (Condition Apply)

 Financing amount extends upto 70% or Tk. 75,00,000 which is highest of total consturction cost.

 Grace period avilable upto 9 months in flat purchase or 12 months in consturction.

 Competitive interest rate.

 No application or processing fee.

Eligibility

Any bangladeshi citizen or NRB, who is capable of repayment can apply for this loan.

SME Loan

NBL offers financial support to small businessmen/enterprise with new products named “Festival Small Business Loan” and “NBL Small Business Loan” has been introduced in the Bank.

Benefits (Condition Apply)

 Maximum Tk.3.00 lac (Festival Scheme) and Maximum Tk.5.00 lac (Small Business Scheme) .

 3 Months (Festival Scheme) and 5 years (including 1 month grace period (Small Business Scheme))

 Collateral Free Advance.

Eligibility

Any genuine and small businessmen/ entrepreneurs/enterprise having honesty, sincerity, and integrity

Consumer Credit

 NBL offers consumer credit facility for retail customers.

Financing items

 Electornics consumer products.

 Computer or Computer acessories.

Benefits (Condition Apply)

 Fast processing.

 Competitive interest rate.

 No application or processing fee.

 Easy monthly installment.

Trade Finance

NBL provides comprehensive banking services to all. types of commercial concerns such as in the industrial sector for export-import purpose as working capital, packing credit, trade finance,Issuance of Import L/Cs,Advising and confirming Export L/Cs. – Bonds and Guarantees .

Benefits (Condition Apply)

 Low interest rate 13.00%-14.50%.

 Minimum processing time.

 Low service charges.

Investment Products

Bai- Muajjal   

Bai-Muajjal may be defined as a contract between a buyer and a seller under which the seller sells certain specific goods (permissible under Islamic Shariah and the Law of the country), to the buyer at an agreed fixed price payable at a certain fixed future date in lump-sum or within a fixed period by fixed installments. The seller may also sell the goods purchased by him as per order and specification of the buyer

Meaning

The terms ” Bai ”  and ” Muajjal ”   have been derived from Arabic words ﻊﻴﺒ  and ﻝﺟﺍ . The word  ﻊﻴﺒ  means purchase and sale and the word  ﻝﺟﺍ  means a fixed time or a fixed period. ” Bai-Muajjal ”  means sale for which payment is made at a future fixed date or within a fixed period. In short, it is a sale on Credit.

Definition

Bai-Muajjal may be defined as a contract between a Buyer and a Seller under which the Seller sells certain specific goods (permissible under Shariah and Law of the Country), to the Buyer at an agreed fixed price payable at a certain fixed future date in lump sum  or  within a fixed period by fixed installments. The seller may also sell the goods purchased by him as per order and specification of the Buyer.

In this Bank, Bai-Muajjal is treated as a contract between the Bank and the Client under which the Bank sells to the Client certain specified goods, purchased as per order and specification of the Client at an agreed price payable within a fixed future date in lump sum or by fixed installments.

Thus it is a Credit sale of goods by which ownership of the goods is transferred by the Bank to the Client but the payment of sale price by the Client is deferred for a fixed period.

It may be noted here that in  case of  Bai-Muajjal and Bai-Murabaha, the Islamic Bank is a financier to the Client not in the sense that the Bank finances  the purchase of goods by the Client, rather it is a financier by deferring the receipt of  the sale price of goods, it sells to the Client. If the Bank does not purchase the goods or does not make any purchase agreement with seller, but only makes payment of any goods directly purchased and received by the Client from the seller under Bai-Muajjal / Bai-Murabaha Agreement, that will be  a remittance/payment of the amount on behalf of the Client, which shall be nothing but a loan to the Client and any profit on this amount shall be nothing but Interest.

Therefore, purchase of goods by the Bank should be for and on behalf of the Bank and the payment of price of goods by the Bank must be made for and on behalf of the Bank. If in any way the  payment of price of goods is turned into a payment for and on behalf of the Client or it is paid to the Client  any profit on it will be Riba.

Important Features

·          It is permissible for the Client to offer an order to purchase by the Bank particular goods deciding its specification and committing himself to buy the same from the Bank on Bai-Muajjal i.e. deferred payment sale at fixed price.

·         It is permissible to make the promise binding upon the Client to purchase from the Bank, that is, he is to either satisfy the promise or to indemnify the damages caused by breaking the promise without excuse.

·         It is permissible to take cash / collateral security to Guarantee the implementation of the promise or to indemnify the damages.

·         It is also permissible to document the debt resulting from Bai-Muajjal by a Guarantor, or a mortgage. or both like any other debt. Mortgage / Guarantee / Cash security may be obtained prior to the signing of the Agreement or at the time of signing the Agreement.

·         Stock and availability of goods is a basic condition for signing  a  Bai-Muajjal Agreement, Therefore, the Bank must purchase the goods as per specification of the Client to acquire ownership of the same before signing the Bai-Muajjal Agreement with the Client.

·         After purchase of goods  the Bank must bear the risk of goods until those are actually delivered to the Client.

·         The Bank must deliver the specified Goods to the Client on specified date and at specified place of delivery as per Contract.

·         The Bank may sell the goods at a higher price than the purchase price to earn profit.

·         The price once fixed as per agreement and deferred can not be further increased
The Bank may sell the goods at one agreed price which will include both the cost price and the profit. Unlike Bai-Murabaha, the Bank may not disclose the cost price and the profit mark-up separately to the Client.

Bai- Murabaha  

Bai-Murabaha may be defined as a contract between a buyer and a seller under which the seller sells certain specific goods (permissible under Islamic Shariah and the Law of the land), to the buyer at a cost plus agreed profit payable in cash or on any fixed future date in lump-sum or by installments. The profit marked-up may be fixed in lump-sum or in percentage of the cost price of the goods.

Meaning

The terms “Bai-Murabaha” have been derived from Arabic words  ﺢﻳﺑ  and  ﺢﺑﺭ  (Bai and Ribhun). The word  ﺢﻳﺑ  means purchase and sale and the word  ﺢﺑﺭ  means an agreed upon profit. ﺢﺑﺍﺭﻣﺍ  ﺢﻳﺑ  ” Bai-Murabaha” means sale on agreed upon profit.

Definition

Bai-Murabaha may be defined as a contract between a Buyer and a Seller under which the Seller sells certain specific goods permissible under Islamic Shariah and the Law of the land to the Buyer at a cost plus agreed profit payable in cash or on any fixed future date in lump sum or by installments. The profit marked-up may be fixed in lump sum or in percentage of the cost price of the goods.

Types of Murabaha

In respect of dealing parties Bai-Murabaha may be of two types.

Ordinary Bai-Murabaha 

           If there are only two parties, the seller and the buyer, where the seller as an ordinary trader purchases the goods from the market without depending on any order and promise to buy the same from him and sells those to a buyer for cost plus profit, then the sale is called Ordinary Bai-Murabaha.

Bai-Murabaha on Order and Promise 

If there are three parties, the buyer, the seller and the Bank as an intermediary trader between the buyer and the seller, where the Bank upon receipt of order from the buyer with specification and a prior outstanding promise to buy the goods from the Bank, purchases the ordered goods and sells those to the ordering buyer at a cost plus agreed profit, the sale is called “Bai-Murabaha on Order or Promise”, generally known as Murabaha.

This Murabaha upon order and promise is generally used by the Islami Banks, which undertake the purchase of commodities according to the specification requested by the Clients and sale on Bai-Murabaha to the one who ordered for the goods and promised to buy those for its cost price plus a marked-up profit agreed upon previously by the two parties, the Bank and the Client.

In this Bank, Bai-Murabaha is treated as a contract between the Bank and the Client under which the Bank purchases the specified goods as per order and specification of the Client and sells those to the ordering Client at a cost plus agreed upon profit payable within a fixed future date in lump sum or by fixed instalments.

Thus it is a sale of goods on profit by which ownership of the goods is transferred by the Bank to the Client but the payment of the sale price (cost plus profit) by the Client is deferred for a fixed period.  

It may be noted here that, in case of Bai-Muajjal and Bai-Murabaha, Islamic Bank is a financier to the Client not in the sense that the Bank finances the purchase of goods by the Client, rather it is a financier by deferring the receipt of sale price of the goods sold by the Bank to the Client.  

If the Bank does not purchase the goods or does not make any purchase agreement with seller, but only makes payment of any goods directly purchased and received by the Client from the seller under Bai-Muajjal/Bai-Murabaha Agreement, that will be a remittance of the amount on behalf of the Client, which shall be nothing but a loan to him and any profit on this amount shall be nothing but Interest (Riba). 

Therefore, purchase of goods by the Bank should be for and on behalf of the Bank and the payment of price of goods by the Bank must be made for and on behalf of the Bank. If in any way the payment of price of goods is turned into a payment for and on behalf of the Client or it is paid to the Client any profit on it will be Riba.

Important Features 

It is permissible for the Client to offer an order to purchase by the Bank particular goods deciding its specification and committing himself to buy the same from the Bank on Murabaha, i.e. cost plus agreed upon profit.

It is permissible to make the promise binding upon the Client to purchase from the Bank, that is, he is to either satisfy the promise or to indemnify the damages caused by breaking the promise without excuse.

It is permissible to take cash/collateral security to guarantee the implementation of the promise or to indemnify the damages.

It is also permissible to document the debt resulting from Bai-Murabaha by a Guarantor, or a mortgage, or both like any other debt.  Mortgage/ Guarantee/ Cash Security may be obtained prior to the signing of the Agreement or at the time of signing the Agreement.

Stock and availability of goods is a basic condition for signing a Bai-Murabaha Agreement. Therefore, the Bank must purchase the goods as per specification of the Client to acquire ownership of the same before signing the Bai-Murabaha agreement with the Client.

After purchase of goods the Bank must bear the risk of goods until those are actually sold and delivered to the Client, i.e., after purchase of the goods by the Bank and before selling of those on Bai-Murabaha to the Client buyer, the Bank shall bear the consequences of any damages or defects, unless there is an agreement with the Client releasing the Bank of the defects, that means, if the goods are damaged, Bank is liable, if the goods are defective, (a defect that is not included in the release) the Bank bears the responsibility.

The Bank must deliver the specified Goods to the Client on specified date and at specified place of delivery as per Contract.

The Bank shall sell the goods at a higher price (Cost + Profit) to earn profit. The cost of goods sold and profit mark-up therewith shall separately and clearly be mentioned in the Bai-Murabaha Agreement. The profit mark-up may be mentioned in lump sum or in percentage of the purchase/cost price of the goods. But, under no circumstances, the percentage of the profit shall have any relation with time or expressed in relation with time, such as per month, per annum etc.

The price once fixed as per agreement and deferred cannot be further increased.

It is permissible for the Bank to authorize any third party to buy and receive the goods on Bank’s behalf. The authorization must be in a separate contract.

Mudarabah

It is a form of partnership where one party provides the funds while the other provides the expertise and management. The first party is called the Sahib-Al-Maal and the latter is referred to as the Mudarib. Any profit accrued are shared between the two parties on a pre-agreed basis, while capital loss is exclusively borne by the partner providing the capital.

Musharaka

An Islamic financial technique that adopts “equity sharing” as a means of financing projects. Thus, it embraces different types of profit and loss sharing partnership. The partners (entrepreneurs, bankers, etc.) share both capital and management of a project so that profits will be distributed among them as per ratios, where loss is shared according to ratios of their equity participation.

Bai- Salam

Under this mode Bank will execute purchase contract with the client and make payment against purchase of product, which is under process of production. Bai-Salam contract will be executed after making any investment showing price, quality, quantity, time, place and mode of delivery. The profit is to be negotiated. In this mode the payment as the price of the goods is made at the time of Agreement and the delivery of the goods is deferred.