Maybank Islamic Launches Islamic Short-Term Revolving Credit Facility
Maybank Islamic has launched Short-term Revolving Credit-i (STRC-i) an Islamic Short-Term Revolving Credit Facility for corporate and business customers.
STRC-i is a shariah-compliant financing facility providing a cost-effective option for customers with definite and specific short-term cashflow requirement such as for working capital, bridging financing or project financing. Maybank customers with existing combined Islamic overdraft and tradeline facility in excess of RM1 million can also set aside a portion of this facility for STRC-i, subject to meeting its terms & conditions.
STRC-i belongs to the same class as Islamic overdraft, also known as Murabahah Cashline-i with subtle differences in operational features. The drawdown for STRC-i is via a Letter of Instruction, while that for Islamic overdraft is via the Wadiah current account. The drawdown for STRC-i is in multiples of RM100,000 over various fixed short-term tenors of 1 month up to 12 months. This can be rolled over based on customer needs, provided the profit on the drawdown has been paid.
“STRC-i will complement our existing Murabahah Cashline-i as an additional facility available for customers to manage their requirement for working capital. It will appeal to the small and medium enterprises (SMEs) sector as it offers attractive rates particularly for working capital financing compared with other instruments. STRC-i is therefore an affirmation of Maybank Islamic’s support for the growth of Malaysian corporations and businesses including the SMEs,” said Ibrahim Hassan, Acting CEO of Maybank Islamic Berhad.
The contract for STRC-i will be based on the Islamic principle of Murabaha, or sale on cost-plus basis. Customers will enter into Asset Purchase and Asset Sale Agreements with Maybank Islamic which will be the bases for the creation of the facility limit and the ceiling profit rate applicable. Notwithstanding this, the STRC-i is a variable rate instrument, where the effective cost to customers will be determined by the actual Asset Selling Price which will be based on Maybank Islamic’s cost of fund.
Maybank expects the attractive pricing of STRC-i to be the main factor drawing customers to this facility. The effective cost to the customer will be tied to the interbank rates and not the base financing rate. In addition, as in the case of all Islamic banking products approved by Bank Negara, legal documents for STRC-i that attract ad valorem stamping will be eligible for a 20% remission from stamp duty. Such principal documents to the financing attract RM5 ad valorem stamp duty for every RM1000.
“Given its cost savings benefit, we are confident that STRC-i will be well-received, and we expect it to significantly contribute to the achievement of our 10-15% growth target in Maybank Islamic’s overall financing portfolio for the next financial year,” added Ibrahim.
STRC-i is Maybank Islamic’s fifth latest mainstream banking product introduced since it commenced operations on 1 January 2008. Maybank Islamic is committed to bring to the market a comprehensive range of ringgit and foreign currency denominated banking products to meet the ever growing needs of Malaysia’s individual and business customers.
For more information on STRC-I, contact Maybank Business and Trade Finance Centres or call Maybank Group Call Centre at 1-300-88-6688, Maybank Islamic at 03- 20748215 / 20747301 / 20748966 or log on to www.maybank2u.com.