December 12, 2018

Type of Services

o   Saving and Current Account Deposits: - Under this category of services are found four kinds of accounts. Those are

1.      Wadiah Amanah (saving with guarantee):- This type of account is opened for unspecified length of time by customers who own the funds in the Bank for safekeeping.  Depositors give their consent to the Bank to deal with the whole or any part of their monies in the manner that it deems fit, so long as it is not against sharia. The Bank will guarantee repayment of the whole sum or any outstanding part in the depositor account without any interest when demanded.


2.      Amanah (current account), This is interest-free current account opened for unspecified length of time and managed through checks until the depositor demands payment and is paid promptly/right away.


3.      Mudharabah (profit sharing saving account), This is a type of investment partnership where a customer deposits money for unspecified length of time and the Bank shares both the profit and loss with her/him. The customer may withdraw his/her deposit at any time, but the Bank may impose some restrictions on the amount to be taken out as this arrangement is both profit and loss sharing partnership.

4.      Mudharabah (fixed-time deposit):- Mudharabah is a profit sharing fixed time deposit. To benefit from this service the depositor (customer) should not withdraw the deposited amount before the agreed date in the contract. If the customer, however, demands the money deposited before the stated date, the Bank may not share the profit.

Ø  Trade partnership financing

  This service consists of

1.      Murabah: - This service involves a request from a customer to the Bank or by the initiative of the Bank to purchase and then on sell to the customer certain goods and/or assets not banned by sharia. The sale by the Bank to the customer is at cost plus on an agreed margin. Payment by the customer is in one or more pre-determined installments at agreed points in time. Ownership of the goods passes to the customer upon delivery by the Bank. Such a sale contract is valid on condition that the price, other cost and the profit margins of the seller are stated at the time of the agreement of sale. The asset/good remains as a mortgage with the Bank until the default is settled. The Bank may ask for collateral, if necessary, for this financial service.

 Among the services included in Murabaha are the following:

•      Murabaha fixed-time financing ---- For production inputs, purchase of machinery or short-term project;

Murabaha revolving  financing --- For purchase of production inputs;

•      Murabaha LC  financing --- For purchase of production inputs from abroad or for buying machinery;

•      Murabaha pre-shipment and Murabaha post-shipment financing for purchase of goods to be exported.


2.      Salam: - This is a financing service that would be made available in cash for operating costs to customers engaged in agriculture as per the agreement to be reached between the Bank and the customer. It is an arrangement whereby the customer delivers the type of product s/he produces in accordance with the type, quality, quantity, price and time agreed upon with the Bank or to the agent/body the Bank has entered salam finance agreement. The Bank may ask for collateral, if necessary.


3.      Istisna: - Istisna is a contract of sales and purchase of assets by specification or order where the price is paid in advance but the assets are manufactured or produced and delivered at a later date. In line with this, the Bank will deliver industrially produced goods or assembled and constructed items as per the orders/specifications of the customers when they are finalized by the producers.

The Bank, based on the job order/specifications of the customer and making a separate agreement with the builders/producers, may make payments to the institutions at once or in installments by assessing the progress of the work. The Bank may ask for guarantee from the customer and producer/builder.

4.      Ijara:- This is a leasing agreement where the Bank buys agricultural vehicles or industrial machinery for lease/rent in its own initiative or by the order of a customer/client and then leases it back over to him/her/it for a fixed period. Depending on the promise given earlier, the Bank can sell the asset or transfer it freely to the lessee customer on or before the last day of the lease agreement. The Bank may ask guarantee to provide this service.


By making use of these a customer can obtain money for:

•      Running costs;

•      Purchase of goods/assets;

•      Export and import trade;

•      Project finance;

•      Lease; and

•      Operating cost for agricultural works/activities.


Ø  Guarantee: - The Bank makes available guarantees such as advance payment guarantee, bid bond and performance bond; and it may request collateral for the services.

Ø  International trade support financing: - The service is provided for customers engaged in export and import trade, and it is an arrangement where customers delegate the Bank or collaborate with it.  This service is similar to the international trade support service given regularly interest free.

Ø  Hawallah: - Local beneficiaries of hawallah can collect money sent to them through branches of the Bank from any part of the country from the closest branch that has interest free banking window and could similarly send money using this service. Besides, customers can similarly utilize the service to receive money sent to them from any corner of the world.


Ø  Foreign Exchange: - Customers of international trade support service can trade/exchange foreign currencies according to the spot rate of the day.

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