^{Islamic Banking} Your guide to ethical and flexible solutions

Shari’ah-compliant financing, the ethical solutions tailored to your needs

Shari’ah-compliant financing offers ethical and transparent solutions, structured using Islamic contracts such as Murabaha (cost-plus-profit sale), Ijarah (Leasing) and other approved models. These structures ensure that every transaction aligns with Shari’ah principles while providing flexible financial support for your business needs.

Key features and benefits

• Diverse financing options - access a range of Shari’ah-compliant facilities, including working capital, guarantees, letters of credit, and goods purchase financing.
• Flexible collateral - accepted forms include Islamic term deposits, cash margins, or standby letters of credit.
• Fast and convenient processing - enjoy a streamlined application and approval process for quicker access to funds.
• Financing limits - supporting both small and large-scale business needs, facility amounts are subject to customer need and eligibility assessment.
• Comprehensive structures - options include Kafala for guarantees, Islamic letters of credit, and various Murabaha and Wakala arrangements.

Profit Calculation and Payment Terms

• Profit/ Rental rates are determined based on a benchmark rate (e.g., Emirates Interbank Offer Rate or EIBOR) plus a margin, depending on the assessment of your application.
• Profit/ Rental is calculated on the outstanding balances and paid on the agreed payment date.
• Rates linked to EIBOR are subject to changes during the life of the deal at the agreed reset frequency
• Facility renewals typically occur annually, with continued access subject to updated documentation.

Donation amount for late payments

In the event of late payment, you are required to pay a Donation Amount as outlined in the Shari’ah documentation. This amount is calculated daily on overdue balances and is donated to charity after deducting actual costs incurred by ADCB calculated in accordance with formula approved by the Islamic Shari’ah Supervision Committee, ISSC.

Credit reporting and compliance

Payment delays or defaults will be reported to Al Etihad Credit Bureau (AECB), which may affect your credit history and score. To maintain your financing facilities, it is essential to:

• Keep your contact details up-to-date.
• Submit renewed documentation immediately upon expiry.
• Adhere to all agreed terms and conditions.

Consequences of non-compliance

Failure to meet the agreed terms may lead to:

• Rejection of future service requests.
• Obligation to pay the Donation Amount for late payments.
• Legal action or account closure.

By understanding these terms, you can manage your Shari’ah-compliant financing effectively while ensuring compliance and maintaining a positive financial relationship.