Term Financing-i
Term Financing-i provides financing to corporations that wish to acquire assets but defer the payment for the asset over a specific period. Depending on the customer’s funding requirements, the financing can be offered based on the concepts of :
| MURABAHAH |
Murabahah financing is based on the three party murabahah concept whereupon the Bank acquires an asset from a vendor and subsequently sells it to the customer. |
| ISTISNA |
Istisna financing is a contract to manufacture/build/fabricate assets with detailed specifications as the contract consideration. |
| IJARAH |
Under the Ijarah Muntahiah Bit Tamleek (lease ending with ownership) financing arrangement, the Bank purchases the completed asset from the customer or from a third party which will subsequently lease it to the customer. The customer can purchase back the asset at the end of the lease tenure at any time during the lease tenure.
It can be used under most sectors of industry such as property development, industrial, manufacturing and agricultural sectors where asset(s) is/are being acquired. |
| MUDHARABAH |
Mudharabah Term Financing-i is based upon the Mudharabah concept where one party will be the fund provider and the other will be the
entrepreneur. The Profit generated will be shared based on an agreed ratio while any loss will be borne solely by the funds provider except in cases of misconduct, negligence or violation of the conditions agreed by the entrepreneur.
Any such restriction must be agreed upon by both RHBIB and the customer when entering into the agreement. |
| MUSHARAKAH |
Musharakah Term Financing-i is based on a Musharakah concept (Profit & loss sharing / Partnership). It can be defined as financing for a business venture provided by RHBIB to its selected customer based on a partnership agreement.
- Both parties will share the loss based on capital contribution
- Both parties will contribute capital
- Both parties will share the profit at a pre-determined ratio
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Murabahah Revolving Credit Facility-i (MRCF-i)
This is a facility to provide financing to companies that wish to acquire assets or obtain financing for working capital. MRCF-i is a short term financing facility based on (three party Murabahah) principle of sale on cost price plus profit.
Upon request by the Customer, the Bank purchases an asset from a vendor and subsequently sells the asset to the Customer at an agreed sale price (plus profit). The financing limit can be made available again or the credit revolved if there are fresh assets underlying the new transactions.
Types of assets to be purchased by the bank are :
- Halal
- Stocks and inventories
- Raw material
Commodity Murabahah Term Financing-i
Based on the concept of Tawarruq – purchase of an asset and subsequent sale of the same asset to a third party to raise funds.
Commodity Murabahah Term Financing-i is sale of certain specified commodities, through an exchange, on a cost plus profit basis. In this application, CMTF-i refers to provision of fund by RHBIB to Customer for a certain period of time supported by commodity trades as the underlying transaction.
RHBIB will initiate the commodity trading with Broker A (commodity) for the purchase of a specified commodity. At the end of the transaction, RHBIB will sell the commodity to Customer at cost + profit. Subsequently, customer will sell the commodity to Broker B for the same amount (of commodity) transacted under the initial Purchase transaction. At the end of the transaction Customer will have the finance amount available for his use in the form of Term Financing-i.
Commodity Murabahah Revolving Credit-i
Based on the concept of Tawarruq – purchase of an asset and subsequent sale of the same asset to a third party to raise funds.
Commodity Murabahah Revolving Credit-i is sale of certain specified commodities, through an exchange, on a cost plus profit basis. In this application, CMRC-i refers to provision of fund by RHBIB to Customer for a certain period of time supported by commodity trades as the underlying transaction.
RHBIB will initiate the commodity trading with Broker A (commodity) for the purchase of a specified commodity. At the end of the transaction, RHBIB will sell the commodity to Customer at cost + profit. Subsequently, customer will sell the commodity to Broker B for the same amount (of commodity) transacted under the initial Purchase transaction. At the end of the transaction Customer will have the finance amount available for his use in the form of Revolving Credit-i.
Commodity Murabahah Overdraft-i
Based on the concept of Tawarruq – purchase of an asset and subsequent sale of the same asset to a third party to raise funds. It is a replacement to the discontinued Cashline. As such it will provide alternative working capital and financing instruments to RHBIB customers.
Commodity Murabahah Overdraft-i (CMOD-i) is sale of certain specified commodities, through an exchange, on a cost plus profit basis. In this application, CMOD-i refers to provision of fund by RHBIB to Customer for a certain period of time supported by commodity trades as the underlying transaction.
RHBIB will initiate the commodity trading with Broker A (commodity) for the purchase of a specified commodity. At the end of the transaction, RHBIB will sell the commodity to Customer at cost + profit. Subsequently, customer will sell the commodity to Broker B for the same amount (of commodity) transacted under the initial Purchase transaction. At the end of the transaction Customer will have the finance amount available for his use in the form of Overdraft-i.
Industrial Hire Purchase-i
Industrial Hire Purchase-i is a banking facility based on the Shariah concept of al-Ijarah (Hire Ends With Sale) which allows you to hire and subsequently purchase assets from RHB Islamic Bank. It is rental for the usage of equipment at a fixed and agreed amount during the financing tenure. The facility concludes with the purchase of the equipment at a nominal fee. The total rental amount comprises the cost of the asset and the Bank’s profit margin.
