NBS targets Haj and Umrah market with new personal finance service

The loans are made under the 'Ijara of services' principle - one of the main financing systems of Islamic banking. NBS was the first bank in the world to make the conversion from conventional to full-service Islamic banking, which forbids charging interest.

The Labbayk service entails adding a profit margin to the transaction, agreed to by the bank and the customer according to Ijara rules. The bank is considered fully responsible to the customer if it does not perform in terms of the agreement and in compliance with Sharia'a laws covering profit and loss.

NBS is the first Islamic bank in the UAE to accept post-dated cheques as security, and the only bank to make facilities available to non-customers who do not have their salaries transferred to the bank.

The size of advances offered, repayment terms, and cost to the borrower are all significantly better than the market, according to Hussein Al Qemzi, NBS's general manager.

"As an Islamic bank, we felt it was appropriate to launch the Haj/Umrah package as our first new retail product," he said.

"Same day approval applies, and we are aiming to secure 10 per cent of the 330,000 potential customers who go on Haj or Umrah every year."

Customers will also receive a free Visa Islamic card for the first year, and have a three months grace period before paying the first instalment.

Al Qemzi said that over the next few weeks the bank would launch a suite of personal finance services fully compliant with Sharia'a principles and approved by the bank's Fatwa and Sharia'a Advisory Board. They will include holiday packages and air tickets, residential accommodation, medical treatment, and education.

"We are dedicated to the Islamic banking principles of fairness and trust for all, and our new products and benefits will reflect these principles," he said.

"Our commitment is to establish a new standard of values and ethics in banking in a way that conventional banks are unable to provide, simply because they are not founded on Islamic banking principles."