Negotiable Instrument of Deposit

A Negotiable Instrument of Deposit is a receipt issued to the depositor certifying that a specific amount of RM has been deposited at a fixed tenure and interest rate. NID has the added feature of being a negotiable and bearer instrument.

Repurchase Agreement

A Repurchase Agreement involves a sale of RM dominated securities with an undertaking for its repurchase at an agreed price on a specified future date.Alternatively, a Repo can be described as a collateralized deposit arrangement for a fixed tenure and interest rate where each deposit is collateralized by securities such as Negotiable Instrument of Deposits (NID) and Malaysian Government Securities (MGS)

General Investment Account

GIA is based on the Syariah Principle of Mudharabah where a contract is made between the provider of capital (depositor) and the entrepreneur (bank) and both parties agree to share the profits according to pre-agreed profit sharing ratio.

Money Market Fund

Money Market Fund is a unit trust scheme which invests in short term money market instrument and fixed income securities. Unit price may be fixed or fluctuate according to underlying assets. Income may be distributed monthly. MMF enjoys tax-exempt status under the Income Tax Act.

Foreign Currency Account

Foreign Currency Account allows you to save in the currency of your choice such as US Dollar, Japanese Yen, British Pound, Swiss Francs and Singapore Dollars. Interest rate will be closely linked to the prevailing rate in the host country.

Ar-Rahnu

Ar-Rahnu is Islamic pawn-broking based on the principles of Wadiah Yad Dhamanah and Ar-Rahn. The former refers to placement of goods or deposits with another person, who is not the owner, for safe-keeping while Ar-Rahn is an arrangement whereby a valuable asset is placed as collateral for a debt. The collateral may be disposed in the event of default.

Overnight Policy Rate

Overnight Policy Rate is set by Bank Negara Malaysia and used by banks to determine their based lending rates.

Wadiah Yad Dhamanah (savings with guarantee)

Refers to placement of goods or deposits with another person, who is not the owner, for safe-keeping. Wadiah Yad Dhamanah is a guaranteed trust, the depository becomes the guarantor and therefore, guarantees repayment of the whole amount or any part thereof, outstanding in the account of depositor, when demanded. The depositors are not entitled to any share of the profits but the depository may provide returns to the depositors as a token of appreciation.

Mudharabah (profit-sharing)

Refers to an arrangement made between two parties i.e. the fund provider and the entrepreneur (who provides expertise) to enable the entrepreneur to carry out business projects. The profit-sharing ratio needs to be pre-determined during the agreement. In the case of losses, the losses are to be borne by the provider of the funds*.

* Unless the loss arises out of willful negligence, misappropriation by the entrepreneur, etc.

Murabahah (cost-plus)

Refers to the sale of goods at a price which includes a profit margin in addition to the cost. Such a contract is valid on condition that the price, other costs and the profit margin of the seller are stated at the time of the agreement on the sale.

Bai Bithaman Ajil (deferred payment sale)

Refers to the sale of goods on a deferred payment basis at a price which includes a profit margin agreed to by both parties.

Ijarah (leasing)

Refers to an arrangement under which the lessor leases an equipment, building or other facility to a client at an agreed rental against a fixed charge, as agreed by both parties.

Qardhul Hasan (benevolent loan)

Refers to an interest-free loan. The borrower is only required to repay the principal amount borrowed, but he may pay an additional amount at his absolute discretion, as a token of appreciation.

Rahn (collateralised borrowing)

Refers to an arrangement whereby a valuable asset is placed as a collateral for a debt. The collateral may be disposed in the event of default.