Maybank Islamic today launched the country's first Islamic On-shore Foreign Currency Financing or OFCF-i. It also introduced its Islamic Foreign Currency Account or FCA-i offering four major currencies.
The two Shariah compliant foreign currency products are innovative and meet the needs of businesses and individuals for their international trade financing and foreign currency needs for investment, education and employment abroad.
"Our latest Islamic products are focused on providing competitive pricing for trade financing as well as protection against foreign currency fluctuations which translate to savings for customers. They offer our customers attractive benefits for their foreign currency needs," said Maybank Islamic Berhad's Acting Chief Executive Officer, Ibrahim Hassan at a media briefing held in Menara Maybank today. Also present was Rozidin Masari, Senior Executive Vice President and Head of Business Banking.
OFCF-i is a Shariah-compliant short term trade financing facility in foreign currency to finance import and export in foreign currencies. OFCF-i adopts the Shariah principle of Murabahah for imports and Bai-al-Dayn for exports.
The minimum financing is USD30,000 or its ringgit equivalent in foreign currency. The types of currency eligible for OFCF-i are US Dollar, EURO, Japanese Yen, Swiss Francs, British Pound, Australian Dollar, Brunei Dollar, Canadian Dollar, New Zealand Dollar, Singapore Dollar or other currencies as determined by the Bank. The period of financing is a minimum of 14 days to a maximum of 180 days for all currencies. "This lower minimum financing amount eligibility will appeal particularly to small and medium enterprises seeking viable trade financing and foreign exchange options," added Ibrahim.
"We also offer savings for US Dollar financing by adopting the SIBOR rate which offers competitive financing cost. The other currencies are based on cost of fund," he added.
Maybank's initiative to introduce the country's first Islamic On-Shore Foreign Currency Financing product is indeed timely given the rapid expansion of international trade. Currently, Islamic trade finance is only offered in Ringgit.
FCA-i is an Islamic foreign currency account that offers four major currencies, namely US Dollar, EURO, British Pound and Australian Dollar. The account is based on the Mudharabah principle and caters to individual and business customers. FCA-i accounts can be opened for export proceeds, receivables, education and employment needs.
For individual accounts, the minimum deposit is USD1,000 or its equivalent. FCA-i offers flexibility, safety and convenience for receiving and transferring overseas funds. Individuals can pay for their overseas education or if they are employed overseas, their salaries can be paid into their FCA-I accounts.
Maybank Islamic is the leading provider of Islamic financial services in Malaysia. For Islamic trade financing, its market share stood at 50% in the last financial year 2007. Islamic trade finance over the total trade finance business of Maybank stood at 30% for the same period.
"The potential for growth in Islamic trade financing is indeed tremendous. Our target is for a 10-15% increase in our trade financing business this current financial year," Ibrahim said.