Tremendous success for BIsB's new personal cash financing service

Thousands of calls were made by prospective customers to the Bank's call centre and branches inquiring about the nature of this new product.

Inquiries focused on several issues mainly these related to the amounts that could be obtained by each customer. Also, there were many questions related to the mechanism used by the Bank in ensuring the product's compliance with Islamic Sharia'a.

Since the Bank firmly believes in the importance of making the picture clear to all parties concerned, Shaikh Abdul Nasser bin Omar Al Mahmood, BIsB Sharia'a Audit Department said:

"The "Tas'heel" scheme offered by the Bank has been designed according to the rules and principles of Islamic Sharia'a. It is now considered as the latest and fastest means of obtaining cash finance in a Sharia'a compliant manner. It is intended to meet the requirements of customers who are not eligible to make use of the Morabaha transactions such as Ijara ending with ownership, declining participation or deferred sale (Musawama)."

"The Service is intended to serve various purposes such as meeting customers' requirements that include Education, Medical Treatment, Marriage, purchase of Building materials, Debt repayment to financial institutions and individuals, Non-manufactured items of various kinds such as Furniture, Windows, Doors, Kitchen furniture and other items." he added.

Sh. A.Nasser continued: "The service offers such other benefits that the Bank cannot purchase through Morabaha. These benefits are such as travel for performing the pilgrimage or Umra, travel for medical treatment, education or marriage or payment of the costs of architectural designs of homes or property."

Commenting on the product's mechanism, Shaikh Al Mahmood explained: "All that a customer has to do is to apply with the Bank for finance of any of the above purposes and once an application is approved by the Bank, the latter will purchase the commodity from a local trader, who may be called trader No.1."

"Once the Bank acquires the goods in question, the Bank in turn will sell it to the customer by Morabaha after signing all the contracts and documents. The Bank will also give the customer the commodity's ownership certificate which is received from trader No.1."

He added: "When the customer takes delivery of the commodity, he can sell it to anyone he wishes or by authorizing a certain firm to sell the commodity on his behalf to trader No.2. It should be noted that the latter trader is different from trader No.1."

Concluding he said: "Upon selling the goods to trader No.2, the latter gives a payment order to BIsB to debit the value of the goods purchased from the customer to the trader's account with the Bank and to deposit its value in the customer's account with the Bank."

Talking about the features of this product as compared with other readily available products by other banks, he said: "The "Tas'heel" product has many advantages that gives it a competitive edge. In addition to its full Sharia'a compliance, it also depends upon reassuring the customer when the Bank purchases the goods from the local market and from a local trader with whom the Bank has no relationship. In such case, the Bank buys the commodity, owns and re-sell it to the customer by Morabaha at which point the Bank has no other involvement."

He added: "This product has the advantage of delivering the commodity to the customer or orders its sale to obtain cash liquidity. A customer has the full liberty to take delivery of the commodity to sell it by him/herself or to let a firm do that on his/her behalf to another trader, provided that he/she should not be the same trader from whom the item was originally purchased. In this case, the recycling of the commodity is not allowed as the Bank's role ends with signing the Morabaha sale agreement with the customer."

In explaining how a customer receives the value of the commodity he purchased from the Bank, Shaikh Abdul Nasser bin Omar Al Mahmood said: "The trader who buys the commodity is responsible for payment of the value of the commodity which is credited to the customer's account. In such case, the trader's account is debited for the amount credited to the customer's account in the Bank."

He added: "I would like to reassure the public that all the transactions carried out by Bahrain Islamic Bank for "Tas'heel" product or other products and services are Sharia'a audited to ensure compliance of all procedures and documents with the requirements of Islamic Sharia'a and are approved by the Bank's Sharia'a Supervisory Board."

BIsB is unique among other Islamic banks by having a Sharia'a Audit Department comprising of four officers all of whom have attended specialized courses in Sharia'a audit, supervision and standards.

The Bank's Sharia'a Supervisory Board includes a number of prominent Islamic scholars led by Shaikh Abdul Latif bin Mahmood Al Mahmood, Chairman, Shaikh Mohamed Jaafar Al Jufairi, Deputy Chairman and both Shaikh Nizam Mohamed Saleh Yacoobi and Shaikh Adnan Abdulla Al Qattan as Board members.