“Islamic banking for everyone”

New Islamic Banking Product:

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i-Term Deposit (Tawarruq)
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Description
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• Term deposit product with fixed profit rate
• Profit derived from commodity purchase and sale transaction
• 2 guaranteed deposit
Capital
• Protected under PIDM (Perbadanan Insurans Deposit
Malaysia) up to RM 250,000 per customer
• Flexibly manage funds based on short or long term needs
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Attractive upfront profit rate
• Reap the returns upon maturity
 Applicable Shariah Contracts:
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1. Tawarruq
• Commodity is used as an underlying asset for the
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purchase and sale transaction between commodity
trader, the Customer and the Bank
• Have two sale and purchase contracts;
a) Sale of asset by seller to purchaser on deffered
b) 3The purchaser at the first sale will sell the asset to third
party on cash
Applicable Shariah Contracts (cont.)
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• The Bank as Purchase agent for the Customer is obliged
to2purchase commodity from its supplier at cost price
• Then, the Bank as Sale agent for the Customer shall
sellthe commodity to the Bank on Murabahah basis
(cost+profit)
• The Bank is obliged to pay the amount due from
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Murabahah transaction as agreed.
Applicable Shariah Contracts (cont.)
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2. Wakalah
• The Customer appoints the Bank to act as the
Customer’s Purchase and Sale Agent for the sale and
purchase transaction of the commodity.
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MODUS OPERANDI
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AND ITS PROCESS
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1. Bank as agent of Customer purchase asset from AS at the price of deposit
placed
2. Bank used deposit from customer to purchase asset
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3. Customer appoint Bank as agent to sell asset to Bank itself at cost price + profit
4. Bank makes deferred lump sum payment upon maturity of deposit
5. Bank sells asset to third party at original selling price
6. Bank obtains cash as per deposit placed
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FEATURES OF
THE PRODUCTS
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 TENURE OF THE DEPOSIT
Range from 1 - 60 months.

PROFIT PAYMENT FREQUENCY

The Bank shall pay Account holder the profit :
(i)Upon maturity for the tenure of 12 months and below;
(ii)Every six months for the tenure above 12 months.
 DEPOSIT

Minimum Maximum
 RM1,000 for 1 month  No maximum
 RM500 for 2 months & deposit amount
above
 PROFIT RATE
TENURE PROFIT RATE (p.a)
1 MONTHS 3.40 %

3 MONTHS 3.50 %

6 MONTHS 3.60 %

9 MONTHS 3.70 %

12 MONTHS AND ABOVE 3.80 %

 APPLICATION ELIGIBILITY
Individuals / Individuals joint accounts aged 18 years old
above

Sole proprietorships

Societies and Associations

Companies / Business Enterprises

Non Interbank Money Market Participants & Government

Institutions
 PREMATURE WITHDRAWAL
Early withdrawal before Partial withdrawal before
Maturity Date Maturity Date
 Withdrawal before completion of 3  Not allowed
months shall not be entitled to any
share of profit [Accountholder agrees
to provide ibra’ (rebate) for the whole
profit to the Bank].
 For withdrawal made after
completion of 3 months, eligible profit
may be paid to Accountholder based
on half of the Profit Rate.
SELLING PRICE
• Selling Price is a principal amount plus profit of which profit is
computed based on the following formula;
 Profit = Purchase Price x Profit Rate x No. of days
365 / 366

 Selling Price = Purchase Price + Profit (total profit for the

whole placement tenure)
• Profit = RM 100, 000 x ( 3.50 ) x ( 91 )
100 365
= RM 872.60

Selling Price = RM 100, 000 + RM 872.60

= RM 100, 872.60
 Illustration :

Purchase Price (Deposit Amount) RM100,000

Profit Rate (fixed profit) 3.50% p.a

Tenure 3 months

No. of Days 91

Placement Date 01/ 04 / 2017

Maturity Date 30/06/2017

Profit RM872.60
Selling Price RM100,872.60
RIGHTS AND OBLIGATIONS OF THE
CUSTOMER AND BANK
 CUSTOMER
RIGHTS OBLIGATIONS
 Entitled to the Profit based on half Provides deposit to be deposited
of the Profit rate once the customer to the Bank.
withdraws the money after
completion of three months.  Appoints the Bank as an agent to
purchase the commodity on behalf
 No right as to profit if the of the customer.
withdrawal of money made before
the completion of three months.
 BANK
RIGHTS
Entitled to the profit sharing with
the customer.
Entitled to the full profit once the
customer withdraws the money
before the completion of three
months.
OBLIGATIONS
 Acts as an agent to the customer.
To execute all such acts and deeds
with respect to the purchase of the
Commodity.
Must act in good faith and in the
best interest of the Account holder.
Must ensure that every transaction
is in accordance with Shariah.