3.

0 EVALUATION OF ISLAMIC BANKING PRODUCT

A cost-plus-profit agreement known as a "murabahah" occurs when a bank buys an item and
then marks it up for a customer.

One of Hong Leong Islamic banking product is:

FIXED DEPOSIT-i

BENEFITS & FEATURES

 HLFD-i allows partial withdrawal a minimum of RM3,000 and in multiples of RM1,000

thereafter,
 A minimum balance of Ringgit Malaysia Five Thousand Malaysia (RM5,000) for
tenure of 1-month or Ringgit Malaysia Five Hundred Malaysia (RM500) for tenure of
2-month
 Maintained in the HLFD-i at all time or any other amount to be determined by HLISB
at any time or from time to time with twenty one (21) calendar days prior notice.

Features:
Compliance with Islamic Principles: Fixed Deposit-i follows Shariah laws, which forbid
receiving or paying interest (riba). The bank and the customer engage into a Musharakah
arrangement in instead of receiving interest.Fixed Investment time: Fixed Deposit-i has a set
investment time, same like traditional fixed deposits. The money is locked in during this
period, and the customer cannot remove it before it matures without paying penalties.
Profit Rates: Shariah-compliant investments yield a portion of the profits, as opposed to set
interest rates, which are offered by conventional Islamic fixed deposits. The success of the
underlying investments and the state of the market may have an impact on the profit rates.

Benefits:
Shariah Compliance: The main benefit is that Fixed Deposit-i is designed in accordance with
Islamic law, giving individuals who prefer not to deal with traditional interest-based products
an interest-free investing choice.
Possibility of Profit: Because profit-sharing is the basis for returns, clients can potentially
share in the gains made by the bank's investments. Capital Preservation: Similar to
traditional fixed deposits, Fixed Deposit-i provides a secure approach to conserve capital as
the invested amount is usually guaranteed.
Fixed duration: IFDs have a set duration during which the funds are invested, just as
traditional fixed deposits. In exchange for keeping the money placed for the predetermined
amount of time, the client agrees to receive a profit based on the predetermined profit-
sharing ratio. Profit Distribution: The bank and the customer split the investment's profits in
accordance with the conditions that were set forth. It's crucial to remember that returns are
dependent on the actual earnings from the underlying investments, thus they cannot be
guaranteed. Automatic Renewal Options: If an investor chooses, certain IFDs have an
automatic renewal option that lets them reinvest their money for a different term.