Frequently Asked Questions

General

OVERVIEW

The main difference between Islamic banking and conventional banking is that Islamic banking is primarily guided by the principles of Shariah, which include the following:

  • Avoidance of Riba/interest
  • Avoidance of Gharar/uncertainty
  • Avoidance of Shariah non-compliant activities which are considered haram (e.g. gambling, liquor, pornography, pig farming, prostitution, entertainment, etc.)
  • Profit generated from Islamic banking transactions must be backed by real economic activities (e.g. Commodity Murabahah transactions and real trading activities)

In addition to the principles of Shariah, Islamic banking is also governed by specific regulatory requirements to ensure Shariah compliance which includes the establishment of a Shariah Committee.

UOBM will be adopting relevant contracts based on the approvedShariah principles which includes:

  • Qard
  • Murabahah
  • Wakalah
  • Bai’ Al-Dayn
  • Kafalah
  • Bai Al-Sarf
  • Wa’d

Qard refers to a contract between a lender and a borrower where the latter is bound to return an equivalent replacement amount to the lender. The Qard contract must not result in any form of contractual benefit for the lender as a result of lending money.

Murabahah refers to the sale and purchase of an asset where the acquisition cost and the mark-up are disclosed to the purchaser.

A Wakalah contract is a contract in which a party, as principal (muwakkil) authorises another party as his agent (wakil) to perform a particular task in matters that may be delegated, with or without the imposition of a fee.

Bai’ Al-Dayn is the sale of payable rights or receivable debt either by the debtor himself or to any third party.

Kafalah refers to a contract where the guarantor conjoins the guaranteed party in assuming the latter’s specified liability.

A Bai Al-Sarf contract is where an exchange of money for money of the same or different type takes place.

Wa`d is literally a promise or undertaking and refers to an expression of commitment given by one party to another to perform certain action(s) in the future.

GENERAL PRODUCTS & SERVICES

19 products will be offered via UOB’s Islamic banking business: 

  • 1. Basic Savings Account-i (Retail)
  • 2. Basic Current Account-i (Retail)
  • 3. Basic Current Account-i (Wholesale)
  • 4. Current Account-i (Wholesale)
  • 5. Fixed Deposit-i (Retail)
  • 6. Fixed Deposit-i (Wholesale)
  • 7. Money Market Deposit (Wholesale)
  • 8. Home Financing-i
  • 9. Retail Term Financing-i
  • 10. Wholesale and Business Banking Term Financing-i
  • 11. Revolving Credit-i
  • 12. Accepted Bill-i
  • 13. Trust Receipts-i
  • 14. Letter of Credit-i
  • 15. Bank Guarantee-i
  • 16. Interbank Placement-i
  • 17. Commodity Murabahah Programme-i
  • 18. Spot FX
  • 19. Forward FX

Yes, there are. The additional risks associated with Islamic products are reputational risk and Shariah non-compliance risk.

No, because Islamic banks and windows apply the same conventional financial benchmarks, such as BLR, KLIBOR, COFI, LIBOR, etc. to determine its cost of funds and return on financial investments.

No, you can remain with your existing Relationship Manager as they are able to handle and offer Islamic transactions as well.

Any individual who is 18 years old and above can buy Islamic banking products and services.

Yes, all UOB branches will offer the full range of Islamic banking products and services.

Product Specific 1

BASIC SAVINGS ACCOUNT-i (RETAIL), BASIC CURRENT ACCOUNT-i (RETAIL), FIXED DEPOSIT-i (RETAIL), BASIC CURRENT ACCOUNT-i (WHOLESALE), CURRENT ACCOUNT-i (WHOLESALE), FIXED DEPOSIT-i (WHOLESALE)

The significant differences can be seen through the profit/interest area and the sources of funds:

  • 1. Hibah/Interest:
    • Islamic: Absolute discretion (Hibah) and should not be promoted upfront
    • Conventional: Contracted and promoted upfront
  • 2. Source of Funds:
    • Islamic: Shariah-compliant sources
    • Conventional: N/A
Retail:    

 

 Islamic

 Conventional

 Contract

 Qard

 Nil

 Relationship

 Lender/Borrower

 Depositor/Bank

 Returns

 Discretionary

 Fixed

 Rates

 Historical

 Agreed Upfront

 Source

 Compliant Source

 Any Source

 Minimum Age

 18 years old

 18 years old

 Excess

 No Excess Allowed

 Allowed with Excess Interest Charged

 Marketing

 Not Allowed for Qard

 Allowed

     
     
Wholesale:    
   Islamic  Conventional
 Contract  Qard  Nil
 Relationship  Borrower/Lender  Depositor/Bank
 Business type  Shariah-Compliant Business  Any Business
 Returns  Discretionary  Fixed
 Rates  Historical  Agreed Upfront
 Source  Compliant Source  Any Source
 Excess  No Excess Allowed  Allowed with Excess Interest Charged
 Marketing  Not Allowed for Qard  Allowed
Retail and Wholesale:  

 

 Islamic

 Conventional

 Contract

 Murabahah, Musawamah,
 Wakalah

 Nil

 Relationship

 Buyer/Seller

 Depositor/Bank

 Business Type
 (for Wholesale Returns)
 Shariah-Compliant Business  Any Business

 Returns

 Fixed

 Fixed

 Rates

 Agreed Upfront

 Agreed Upfront

 Source

 Compliant Source

 Any Source

 Minimum Age

 18 years old

 18 years old

 Early Withdrawal

 Allowed with Rebate

 Allowed with Penalty

There are no distinct benefits as both Islamic retail and wholesale products and services are at par with that of the conventional product and service offerings.

There are no distinct benefits as both Islamic retail and wholesale products and services are at par with that of the conventional product and service offerings.

There are no distinct benefits as both Islamic retail and wholesale products and services are at par with that of the conventional product and service offerings.

Yes, you can perform transactions through our branches’ ATM, RCDM (Fund Transfer), CDM, RCDM (Cash Deposit) and ESM (Cheque Deposit).


  • Yes, a debit card will be provided for both Islamic current and savings accounts. 

    This is the same debit card that the conventional banking accounts are using. However, the only difference is that the debit card will now be tagged to Islamic current and savings account.

No, the debit card can only be used for Shariah-compliant transactions. Transactions at Shariah non-compliant merchants (e.g. merchants selling alcohol and pork) will be blocked.

Yes, Islamic current and savings accounts are allowed to be linked to the same ATM / Debit Card as the conventional banking accounts for the purpose of ATM withdrawals.

Yes, you can apply for PIB for your Islamic current account / savings accounts.

Yes, you can transfer funds from your conventional current account / savings account to be placed as your Islamic fixed deposit.

No, you are not able to use the funds from your Islamic current account / savings account as your conventional fixed deposit.

Yes, but it is subjected to certain conditions as it is based on your instruction on Qard repayment (loan by Bank).

Yes, you can instruct the Bank to debit your conventional current account / savings account for your Islamic bank account instalment payments.

Yes, you will be able to check your available balances at UOBM’s branches’ ATM, RCDM, Personal Internet Banking or Business Internet Banking (for non-individuals).

Businesses involving the following activities are considered haram/illegal in Islamic banking:

  • Liquor and alcohol
  • Gambling
  • Pig and pork
  • Interest-based lending
  • Conventional insurance
  • Shariah non-compliant investment
  • Activities detrimental to environment

Yes, the profits and principal from the Islamic fixed deposit can be credited into the conventional current account / savings account.

Yes, a separate cheque book for Islamic banking current accounts will be provided. It is differentiated from the conventional cheque book by the green shade and Skim Perbankan Islam logo.

Generally, Islamic current accounts are not allowed to go into excess unless it is subject to special handling, which is subjected to the existing approval limits.

No, customers are not allowed to open an Islamic current account / savings account with their conventional account’s fixed deposit (incl. principal and interest). This is because the conventional fixed deposit amount contains interest which is prohibited in Islamic banking.

Yes, customers may debit the required amount from their Islamic current account / savings account for their Conventional Insurance Premium / Conventional Loan Repayment / Conventional Bond / Conventional UT / Conventional Investment Instruments payments.

You will be able to make a placement to your Fixed Deposit-i account via Self-Service Banking terminals, Personal Internet Banking, Business Internet Banking, IVR and over-the-counter.

No, customers must pledge their Islamic fixed deposit as a security to secure an Islamic financing facility.

No, customers must pledge their conventional fixed deposit as a security to secure a conventional loan facility.

No, there will not be a passbook provided as BSA-i is a statement-based product.

Yes, customers can perform a premature FD-i withdrawal. The rebate (‘Ibra) on contracted profit shall apply.

Yes, customers can perform a partial withdrawal for their FD-i accounts, for individual customers only.

No, backdating of the FD-i is not allowed. However, for scenarios where the error arises from the Bank’s fault, the error can be rectified via good value (similar to backdating action).

HOME FINANCING-i & TERM FINANCING-i

Home Financing-i / Term Financing-i facilitates the purchase of a house or property under construction, completed property from developer or vendor (sub-sale), refinancing and re-mortgage. The Bank’s sale price is derived based on the Contracted Profit Rate, which is fixed throughout the tenure. However, the Effective Profit Rate is calculated on a variable rate basis and the facility is secured against the property to be financed. Additional security such as a guarantor, etc. may be requested depending on the credit assessment.

Yes, Islamic financing is applicable to such customers but it is subjected to the Shariah committee’s decision. The Shariah encourages discussion on such cases where there are many considerations on the following issues:

  • i. Mixed Business Activities where there are significant or insignificant non-Shariah compliant component in their business
  • ii. Group of Companies where the subsidiaries or related companies are involved in non-Shariah compliant activities
  • iii. Certain Scenarios for example change in business activities into non-Shariah compliant activities
  • iv. Contradicting Market Practice such as inconsistent practices in the market

New Guidelines where redefinition of certain practice is made by regulators.

Yes, they are allowed to apply for Islamic financing. There is no restriction for individuals working in non-Shariah compliant companies to apply for Islamic financing.

Home Financing-i / Term Financing-i is arranged under Tawarruq where the main contract is Murabahah.

Tawarruq is an arrangement that consists of two sale and purchase contracts. The first involves the sale of an asset by a seller to a purchaser on a deferred basis. Subsequently, the purchaser of the first sale will sell the same asset to a third party on a cash and spot basis.

An ordinary conventional Home Loan / Term Loan is given on the basis of the debtor–creditor relationship, whereby the loan amount given is charged at a variable effective interest rate, normally quoted at a percentage above or below the Base Rate (BR) or Base Lending Rate (BLR) over the loan period and repayable in periodic instalments. Simultaneously, arrears in conventional loans are normally capitalised with no maximum Contracted Profit Rate (CPR). 

In a Home Financing-i / Term Financing-i under the Islamic facility, a seller–buyer relationship is established under the arrangement of Tawarruq. The Selling Price is fixed upfront based on the maximum CPR at the point of entering the aqad (contract). The selling price is paid in instalments over the agreed financing period. However, for variable profit rate financing with an ibra’ (rebate) mechanism, the customer is paying at the current Effective Profit Rate (EPR). The difference between the maximum CPR and EPR is the ibra’ (rebate) given to the customer.

Selling price is the total amount (maximum) of payments the Bank may collect from the customer during the financing tenure as stipulated in the Letter of Offer.

Selling price is the Total Sum of Instalment payable throughout the tenure computed by using the Contracted Profit Rate determined by the Bank.

The maximum Contracted Profit Rate is subject to approval from the Asset Liability Committee (ALCO).

If the changes in the prevailing IBR cause the instalment amount to be increased or reduced:

  • A. By an amount which is less than RM50 per month, the Bank reserves the right to vary the instalment amount on quarterly basis or at such intervals as mutually agreed;
  • B. By RM50 or more per month, the Bank will vary or increase the instalment amount, but the total instalments to be collected shall not exceed the Selling Price.

The documents involved are as follows:

  • Transaction Documents:
    • Letter of Offer
    • Standard Terms and Conditions
    • Consent from Security Party
    • Product Disclosure Sheet
    • Murabahah Sale Agreement (MSC) – to be prepared by lawyer, executed by UOBM as the attorney for customer and attorney for UOBM
  • Security Documents:
    • Property – Legal Charge: (i) Facility Agreement; (ii) 1st and 3rd Party Charge
    • Property – Legal Assignment: (i) Facility Agreement; (ii) Deed of Assignment (iii) Power of Attorney
    • Pledge of Fixed Deposit – Memorandum of Deposit, Letter of Set Off, Guarantee cum Letter of Set Off
    • Involved guarantee by individual – Personal Guarantee

The product is open to all Malaysians, Singaporeans, and Permanent Residents.

No, both Muslim and non-Muslim customers are eligible to apply.

The product can be used to finance all types of properties including houses, townhouses, apartments, condominiums, and flats. It is also applicable to commercial properties.

All are compulsory and it is to be taken with the Takaful Provider appointed by the Bank. Waivers are subject to management’s approval.

The maximum tenure is up to 35 years or the maximum age of 70 years old, whichever is earlier.

As per the BNM guideline, compensation charges are as follows:

  • In Tenure (during financing period)
    1% of the overdue instalment amount or on the outstanding balance of the facility in case of default causing the facility to be terminated or brought to court for judgment prior to the expiry of the tenure of the facility.
  • Off Tenure (after maturity)
    At prevailing Bank Negara Malaysia’s Islamic Interbank Money Market (IIMM) Rate on the total outstanding balance of facility calculated on daily rest basis.

Note: The compensation charges shall not be compounded on the total outstanding amount.

Yes, and ibra’ (rebate) on early settlement must be given by the Bank.

Yes, under the following situations:

  • 1. Any early settlement or early redemption by customer including prepayment;
  • 2. Any settlement of the facility due to any financing restructuring exercise by customer;
  • 3. Any settlement by customer occurrence of the event of default;
  • 4. Any settlement by customer in the event of termination or cancellation of the facility before the expiry of the tenure;
  • 5. If the facility is based on variable rate, on the difference between the Contracted Profit Rate and Effective Profit Rate when the Effective Profit Rate is lower than the Contracted Profit Rate.

Note: Please refer Product Disclosure Sheet for illustration of ibra’ (rebate).

Kindly refer below for the fees and charges applicable:

No.

Fees and Charges

Details

1.

Stamp Duty

As per the Stamp Duty Act 1949 (Revised 1989), subject to any stamp duty exemption or remission order. From 1 January 2016 until 31 December 2017, there is a twenty per cent (20%) stamp duty remission under Stamp Duty (Remission).

2.

Wakalah Fee

RM106.00

3.

Termination Fee

A termination fee of RM2,000.00 shall be charged if the facilities herein or any part thereof is cancelled by customer prior to the disbursement of the facilities for any reason whatsoever.

4.

Processing Fee / Set-up Fee

One-time fee charged for approved financing:

 Types of Properties

 Fees

 Residential

 No Charge

 Commercial

 RM212.00

 Foreigner

 RM530.00 (Set-up Fee)

5.

Redrawal Fee

RM53.00 for each redrawal transaction effected.

6.

Postage Fee

RM70.00 per year and charged on and debited to each Home Financing-i, where the correspondence address of such accounts is outside Malaysia.

7.

Service charge imposed during redemption

RM53.00

8.

Ad-Hoc Statement Request

RM5.30 to RM10.60

9.

Retrieval/Photocopy of Security Documents

  • RM10.60 per document per copy for non-certified true copy (CTC).
  • RM15.90 per document per copy for certified true copy (CTC).

10.

Confirmation for EPF

RM21.20



Note: All fees and charges indicated are inclusive of 6% GST.

All fees will be charged during your first instalment.

You will be required to settle the fees or charges as soon as possible; we will send advance notice to inform you of your outstanding fees and charges.

For Buildings under Construction (BUC), customer’s first instalment is upon full disbursement or expiry of grace period term, whichever is earlier. 

For completed properties, customer’s first instalment will comment after full disbursement.

For sub-sale financing, customer’s first instalment will commence after full disbursement.

Yes, you may opt for physical delivery. However, you are required to inform the Bank beforehand of your intention to take physical delivery. This instruction must be given before the Bank executes the commodity transaction. All arrangement and cost will be borne by you.

Yes, you must give at least one month’s written notice to the Bank or pay one month’s profits-in-lieu of the amount redeemed (to be deducted on the rebate amount to be given) if you are unable to serve this written notice.

ACCEPTED BILLS-i (AB-i)

A conventional loan is given on a debtor–creditor relationship. Interest will be charged on the amount of the loan. This represents the financial institution’s cost in obtaining the funds. 

Islamic financing works on the concept of purchasing and selling whereby the Islamic banking institution purchases asset and subsequently sells it to the customer at a selling price inclusive of its profit, on a deferred payment basis.

UOBM will be adopting the following contracts:

  • Murabahah
  • Bai’ Al-Dayn

A contract that refers to the sale and purchase transaction for the financing of an asset, where the cost and profit margins are made known and agreed by all parties involved. 

In this case, the Bank purchases the asset from the supplier (evidenced by bill) and sells it to the customer at a profit for deferred settlement (lump sum basis).

It is the sale of payable rights or receivable debt either by the debtor himself or to any third party. 

Securities or debt certificates will be issued by a debtor to a creditor as evidence of indebtedness.

Customers of Corporate Banking, Commercial Banking, Bumiputra Banking, Business Banking / Small Medium Enterprise (SME).

No, AB-i financing rate is competitive. 

With variable rate financing products, the Bank is at a better position to offer competitive rates that reflects the prevailing economic condition.

There is no waiver of stamp duty for new facilities. 

However, stamp duty is waived if the facility is transferred from conventional to Islamic banking.

Yes, Islamic trade finance products and services are available to non-Muslims.

No, only Islamic FD is allowed to be pledge to an Islamic facility.

No, the same collateral cannot be cross-charged to both conventional and Islamic facilit

No, the Bank is not allowed to impose any commitment fee on the undrawn remaining unutilised balance of the AB-i facility.

Yes, there will be a separate LO. Different terminology is used under Islamic banking. The Standard Terms & Conditions (STC) are also not the same.

No, the Bank is prohibited from granting financing to companies, bodies or individuals whose activities explicitly involve Shariah non-compliant elements such as gambling, liquor industry and other haram activities.

There are special terms and conditions under Islamic banking. That is why it cannot use conventional banking’s security documents. 

Per existing arrangement, the new set of Islamic security documents will be posted onto our website for solicitors to print.

The bank is able to open AB-i of almost any size subject to the customer’s facilities with UOB. We consider the complexity of the transaction; the goods that are being traded; and, other factors having to do with the parties to the transactions and where they take place.

The bank is able to open AB-i of almost any tenure subject to the tenure agreed upon within Letter of Offer.

Yes, facility is needed for you to use AB-i. If you do not have any existing facilities with UOB, but wish to use AB-i or establish facilities with the Bank, please contact us at the nearest UOB branch or contact your UOB Relationship Manager.

Yes, settlement may be submitted online at Business Internet Banking (BIB). To find out more, please contact us at the nearest UOB branch or contact your UOB Relationship Manager.

Takaful is required and insurance is allowed subject to BNM’s Shariah Advisory Council (SAC) resolution requirements.

Yes, open-account trade transaction may be financed with AB-i.

Product Specific 2

BANK GUARANTEE-i (BG-i)

BG-i will be adopting the Kafalah contract.

Kafalah refers to a contract where the guarantor conjoins the guaranteed party in assuming the latter’s specified liability.

No. BG-i is available to all eligible customers, regardless of their religious background.

Customers from Corporate Banking, Commercial Banking, Bumiputra Banking, Business Banking / Small Medium Enterprise (SME).

Yes, with the execution of fresh legal documents.

There is no waiver of stamp duty for new facilities However, stamp duty is waived if the facility is transferred from conventional to Islamic banking.

Yes, Islamic trade finance products and services are available to non-Muslims.

No. Only Islamic FD is allowed to be pledge to an Islamic facility.

No. The same collateral cannot be cross-charged to both conventional and Islamic facility.

Yes. There will be a separate LO. Different terminology is used under Islamic banking. The Standard Terms & Conditions (STC) are also not the same.

There are special terms and conditions under Islamic banking. That is why it cannot use conventional banking’s security documents. 

Per existing arrangement, the new set of Islamic security documents will be posted onto our website for solicitors to print.

Yes, facility is needed for you to use BG-i. If you do not have any existing facilities with UOB, but wish to open BG-i or establish facilities with the Bank, please contact us at the nearest UOB branch or contact your UOB Relationship Manager.

We are able to open BG-i of almost any tenure subject to the tenure agreed upon within Letter of Offer.

Yes, application may be submitted online at Business Internet Banking (BIB). To find out more, please contact us at the nearest UOB branch or contact your UOB Relationship Manager.

You will need to give us a written instruction on the cancellation of your BG-i. UOB will only cancel your BG-i upon receiving your Beneficiary’s consent/instruction.

LETTER OF CREDIT-i (LC-i)

LC-i will be adopting the Wakalah contract, where the Bank is appointed as agent to purchase Shariah Compliant goods on behalf of customer.

A contract in which a party, as principal (muwakkil) authorises another party as his agent (wakil) to perform a particular task in matters that may be delegated, with or without the imposition of a fee.

No, LC-i is available to all eligible customers, regardless of their religious background.

Customers from Corporate Banking, Commercial Banking, Bumiputra Banking, Business Banking / Small Medium Enterprise (SME).

Yes, with the execution of fresh legal documents.

There is no waiver of stamp duty for new facilities. However, stamp duty is waived if the facility is transferred from conventional to Islamic banking.

Yes, Islamic trade finance products and services are available to non-Muslims.

Yes, facility is needed for you to use LC-i. If you do not have any existing facilities with UOB, but wish to open a LC-i or establish facilities with the Bank, please contact us at the nearest UOB branch or contact your UOB Relationship Manager.

The bank is able to open LC-i of almost any size subject to your facilities with UOB. We consider the complexity of the transaction; the goods that are being traded; and, other factors having to do with the parties to the transactions and where they take place.

Yes, application may be submitted online at Business Internet Banking (BIB). To find out more, please contact us at the nearest UOB branch or contact your UOB Relationship Manager.

Takaful is required and insurance is allowed subject to the Shariah Committee’s requirements.

You will need to give us a written instruction on the cancellation of your LC-i. UOB will only cancel your LC-i upon receiving your Beneficiary’s consent through the Advising Bank of the Credit.

Once the Letter of Credit is opened your fee cannot be refunded. We recommend our clients to first assure themselves of their suppliers' ability to perform the transaction before opening any banking instruments to them.

No, only Islamic FD is allowed to be pledge to an Islamic facility.

No, the same collateral cannot be cross-charged to both conventional and Islamic facility.

Yes, there will be a separate LO. Different terminology is used under Islamic banking. The Standard Terms & Conditions (STC) are also not the same.

There are special terms and conditions under Islamic banking. That is why it cannot use conventional banking’s security documents.
As per existing arrangement, the new set of Islamic security documents will be posted onto our website for solicitors to print.

TRUST RECEIPT-i (TR-i) / FOREIGN CURRENCY TRUST RECEIPT-i (FCTR-i)

A conventional loan is given on a debtor/creditor relationship. Interest will be charged on the amount of the loan. This represents the financial institution’s cost in obtaining the funds. 

Islamic financing works on the concept of purchasing and selling whereby the Islamic banking institution purchases asset and subsequently sells it to the customer at a selling price inclusive of its profit, on a deferred payment basis.

TR-i/ FCTR-i will be adopting the Murabahah contract.

Murabahah refers to the sale and purchase of an asset where the acquisition cost and the mark-up are disclosed to the purchaser. 
In this case, the Bank purchases the asset from the supplier (evidenced by bill) and sells it to the customer at a profit for deferred settlement (lump sum basis). The Bank may procure the asset via an appointed agent, or directly from supplier.

No, TR-i/FCTR-i is available to all eligible customers, regardless of their religious background.

Customers from Corporate Banking, Commercial Banking, Bumiputra Banking, Business Banking / Small Medium Enterprise (SME).

No, the Bank is prohibited from granting financing to companies, bodies or individuals whose activities explicitly involve Shariah non-compliant elements such as gambling, liquor industry and other haram activities

There is no waiver of stamp duty for new facilities.
However, stamp duty is waived if the facility is transferred from conventional to Islamic banking.

Yes, Islamic trade finance products and services are available to non-Muslims.

Yes, facility is needed for you to use TR-i. If you do not have any existing facilities with UOB, but wish to use a TR-i or establish facilities with the Bank, please contact us at the nearest UOB branch or contact your UOB Relationship Manager.

We are able to open TR-i of almost any size subject to your facilities with UOB. We consider the complexity of the transaction; the goods that are being traded; and, other factors having to do with the parties to the transactions and where they take place.

We are able to open TR-i of almost any tenure subject to the tenure agreed upon within Letter of Offer.

Yes, settlement may be submitted online at Business Internet Banking (BIB). To find out more, please contact us at the nearest UOB branch or contact your UOB Relationship Manager.

Yes, you can give instructions to UOB to make partial payment/full settlement for your TR-i/ FCTR-i.

No, there is no penalty charge if you settle your TR-i before the due date. However, there would be early settlement cost for early settlement of FCTR-i¬ which is deducted from the Ibra’ (rebate) amount.

The bank shall grant Ibra’ (rebate) to you for making partial payment or full settlement of your TR-i/ FCTR-i financing before the end of the financing tenure.

No. However, open-account trade transaction may be financed with TR-i/ FCTR-i

FX SPOT-i & FX FORWARD-i

FX Spot-i is a contract where customers deliver their booked Ringgit/foreign currency in exchange of their agreed foreign currency/ Ringgit. Generally, the settlement date for a FX Spot-i contract is (T+2), or it can be for T or T+1. 

FX Forward-i involves two dissimilar ribawi items i.e. two different currencies. The exchange of two counter values must be spot or simultaneous (hand to hand). The rate of exchange is locked in today but delivery of two counter values is deferred to a future date.

They are compliant if it meets all the requirements of Shariah and used for hedging purposes only.

For settlement of Islamic FX Spot-i and FX Forward-i, cable charges, commission fees and agent charges are applicable. Please refer to branch for fees chargeable.

For FX Spot-i, it covers ALL customers. 
For FX Forward-i, it covers Privilege Banking, Private Banking, SMI & Corporates, Commercial & FI customers.

The customer is required to maintain either a Savings Account-i or Current Account-i to facilitate the debiting and crediting of Islamic FX contract.

There is market risk arising from unfavourable exchange rate movement for FX Forward-i contract.

There will be marked-to-market charges for cancellation of Islamic FX Spot-i/ FX Forward-i contract.

Please contact our Global Markets Sales Dealers at 03- 2613 8188; 03- 2776 9166 or 03- 2776 9188.

You are encouraged to open an i-CASA before investing in Islamic FX.

Islamic foreign exchange forward contracts widely use the principle of wa’d in order to fulfil the need of hedging. The contract is an alternative solution to conventional forward contract, whereby one party will promise to the other party to exchange currency at an agreed rate for a future date.

Islamic FX can be used for all Shariah Compliant activities.

Yes, you are required to obtain FX limit from the bank prior to entering Islamic FX Forward-i contract.


  • Should you require additional information, please contact our Global Markets Dealers at 03- 2613 8188; 03- 2776 9166 or 03- 2776 9188.

It is important that you inform the Bank of any changes in your contact details to ensure that all correspondences reach you in a timely manner.

WHOLESALE FINANCING – TERM FINANCING-i & REVOLVING CREDIT-i

Selling Price is the total amount (maximum) of payments the Bank may collect from the customer during the financing tenure as stipulated in the Letter of Offer. This is applicable in the Term Financing-i and Revolving Credit-i.

Ceiling Rate mechanism is an instrument to diversify the financing portfolio of the Islamic banks from over-reliance on fixed-rate financing as well as to mitigate the risk associated with funding mismatch. 

Under the Commodity Murabahah Term Financing, the selling price of the asset sold to the customer on deferred terms would be fixed at a profit rate known as the Ceiling Rate or Contracted Profit Rate (CPR) which is often higher than the Effective Profit Rate (EPR), where, in principle, the contractual selling price would be higher. The customer shall not pay an amount that is more than the contracted Sale Price. 

However, rebate known as ibra’ (a waiver of right to claim unearned profit) is required to be granted, in order to match that of the current market level effective profit rate. 

The Ceiling Rate mechanism with maximum CPR, EPR and Rebate mechanism is only applicable for variable rate Term Financing-i. It is not applicable for Revolving Credit where the settlement is made on a lump sum basis, and Sale Price is calculated based on a fixed Profit Rate.

Islamic interbank rate is the daily weighted average rate of the Mudarabah interbank investment at the IIMM in Kuala Lumpur, where the individual rates being weighted accordingly by the volume transactions at those rates. 

Through the IIMM, the Islamic banks and banks participating in the Islamic banking Scheme (IBS) would be able to match the funding requirements effectively and efficiently.

There is no waiver of stamp duty for new facilities. However, stamp duty is waived if the facility is transferred from conventional to Islamic banking.

Brokerage fee is the charge for the buy and sell transaction under Commodity Murabahah. The Bank is collecting this fee in order to recoup the cost for the commodity trading.

No, only Islamic FD is allowed to be pledged to an Islamic facility.

No, the same collateral cannot be cross-charged to both conventional and Islamic facility.

Yes, a new Murabahah Sales Contract (MSC) will be executed on your behalf and a new RC-i Account (deal) will be opened. 

You will still need to provide the Drawdown Notice three days in advance before the RC-i maturity date (as per usual process).

No, the Bank is not allowed to impose any commitment fee on the undrawn balance of the Islamic revolving credit facility.

Yes, there will be a separate LO as different terminology is used under Islamic banking. The terms and conditions are also not the same.

No, the Bank is prohibited from granting financing to companies, bodies or individuals whose activities are explicitly involved in Shariah non-compliant elements such as gambling, liquor industry and other haram activities,

There are special terms and conditions under Islamic banking. As such, the conventional banking’s security documents are not to be used for Islamic financing. 

As per existing arrangement, the new set of Islamic security documents will be posted onto our website for solicitors to print.