Personal Finance Key Facts
Personal Finance Product description: Personal Finance designed to meet all our customers need to get the instant launch of their dreams and secure their future, as we are here to support them in all this by providing the below mentioned various solutions of Personal Finance that will suit all their life needs noting that these solutions has been approved by the Bank Sharia supervision committee:
• New Personal Finance*: This product, provides liquidity to help the customer who is planning to get married, travel, or furnish your home or pay rent costs, or get any of his personal necessities
• Additional Personal Finance/Top-up*: This product provides additional liquidity in order to settle customer existing liability with the bank and further procure additional funds to help him meets other financial commitments.
• Personal Finance for Liability Takeover*: This product provides additional liquidity to settle customer existing liability with other bank in the country
• Goods Murabaha This product is available for customer who wants to avail a finance in order to purchase specific goods from a local supplier
• Shares Murabaha This product is available for customer who needs liquidity through buying shares under Murabahah and may liquidate the same after possessing.
• Service Ijarah This product is available for customer who wants to finance specific service from a local service provider (Umrah, Education, Medical treatment, Travel and House/Flat rent) * The transaction will be executed using Bonds/ Commodity Murabaha
Terms & Conditions:
1. Personal finance transaction is carried out in compliance with Islamic Sharia rules and principles, through the implementation of Murabahah/Ijarah transactions, where the bank buys the Bonds/Commodities and sells them to the customer (Principal amount + agreed profit + Administrative fee), or lease a service from a Service provider and sublease it to the customer on the basis of deferred payment in addition to a specific administrative fees as agreed in the contract signed by the customer during executions of the transaction. This contract also includes other terms and conditions related to the payment of the finance, after which the transaction is executed on the system and the Bonds/Commodity will be transferred into customer's name. The customer shall have right to keep these Bonds/Commodity or liquidate them, whilst customer shall have to utilize the leased services in case of Service Ijarah.
2. If finance application is approved, it will be also in accordance with the UAE Central Bank regulations, as per the below mentioned details: a. Finance tenure will be up to 48 months (60 months for customers working for MOD) b. A transaction fee will be charged as stated later in this document c. A grace period can be granted for the first installment of the liability determined in the Finance Contract, (for instance, if the finance tenor is 1/1/2021 till 31/12/2024, at agreed upon rate, the contract will be signed after profit calculation such basis), and both parties agrees, for instance, on settlement to start from March 2021.
3. The Bank has the right to cancel or amend the finance approval before executing the finance transaction with a prior notice to the customer
4. The Customer shall have the right to have a Cooling-Off period, of 5 complete business days commencing from the time of signing the contract for the relevant finance, hence if the customer opted to terminate the contract within the cooling off period, the bank has to refund to it any related Fees and direct costs already incurred by the customer. However, if the customer, within the cooling off period, disposed of/acted on the subject of the contract in any manner, its right in the cooling off period will cease. The customer may also waive its right in the cooling off period by its written consent. For more information, please review the relevant Form issued along with the finance approval
5. Once finance contract is signed, customer must abide by the terms, conditions and the fees of the finance
6. Other Terms & Conditions are to be considered after executing the finance:
a. If the requested transaction is Additional Personal Finance, it will be a separate independent transaction from any previous existing transaction, with new conditions based on the bank’s approval for such Additional Finance.
b. Finance installments has to be paid on the due dates, and if customer fail to pay any installments for any reason the remaining installments shall become immediately due and payable without the need for any notice and the bank may claim the remaining installments through the legal procedures
c. If the customer fails to pay any finance installments on the due dates, this may affect customer’s credit rating, which may limit the customer eligibility to another finance in the future from the bank or other banks
d. In case of a delay for more than 7 days from the due date of the installment, Bank may apply the donation clause and charge 1% of the installment amounts on monthly basis until the past due installment amounts are paid. The bank may use such amount to recover the actual cost of the follow-up and collection of that default amounts.
e. If the salary is one of the securities required for the finance, customer needs to transfer the salary to the bank as soon as the required finance transaction is completed, and in the event of termination of the customer’s services by customer’s employer and transfer of End of Service benefits (EOSB) to the account, or in case of resignation or changing employer, the bank is entitled to block the EOSB and any other amounts available in the account in order to pay any overdue amount (s) of the finance and to settle any installments on its due date, or transfer the EOSB/amounts to pay the installments that have not been settled according to their due dates
Fees and charges details:
1. Administrative fee of 1% (Minimum AED 500 and AED 2,500 maximum) of finance amount will be charged, and If the finance is executed using Bonds/ Commodities Murabaha, the finance will be subject to an additional fee which is trading fee of 0.65% of the value of the finance amount in case of Bonds Murabaha.
2. Profit rates start, for instance, from 4.88% on reducing balance (2.59% fixed) and the percentage is determined based on customer profile
3. The finance amount, will be calculated as per the below illustrative example: Example: If Finance amount of AED 100,000, Tenure of 48 months, and Profit Flat rate is 2.50% (4.75% reducing, liability details will be as follows:
• Profit amount : AED 10,000
• Total amount : AED 110,000
• Monthly Installment : AED 2,292
• Administrative Fee : AED 1,000 • Bonds Trading fee : AED 650
• Takaful Fee : AED 609
4. If customer wishes to make an early settlement in the future for the outstanding amount, customer will be required to pay an additional amount as an early settlement fee of 1% on the total remaining principal amount of the finance, up to a maximum of AED 10,000, which is in accordance with the UAE Central Bank regulations, as illustrated in below example: Example: If the total outstanding of the Finance Liability is AED 100,200 (AED 90,000 principal amount + AED 10,000 deferred profits + AED 200 accrued profits till settlement date), the customer will be required to pay AED 91,100 to settle the finance, and that amount consist of the following amounts, given that the amount of Deferred profits (AED 10,000) will be dropped:
• The outstanding principal amount (AED 90,000)
• Early settlement fee of 1% of the outstanding principal amount (AED 900)
• The amount of accrued profits (AED 200) till the settlement date. Note: Above outlined details in the above examples are for illustrative purpose only and may vary based on customer type, segment, finance type, installment dates and any other factor the Bank deem suitable for as per Bank’s policy
5. If the requested transaction is a liability takeover from another bank, then, Documentation fee (1% of liability value) will be waived, however this fee percentage will be collected on any additional amount (if requested)
6. Life Takaful Fee:
a. A Life Takaful fee will be charged on the total liability amount (principle + profit) in order to cover the outstanding amount in cases of death or permanent total disability, God forbid (Kindly refer to the Schedule of Fee & charges on Bank website to know the Takaful Fee)
b. The proceeds of such policy shall be used only to settle the finance outstanding amount, if any, in addition to the profit and any other amounts due shall be paid by the customer or his/her heir(s), as the case may be
c. All takaful policy premiums shall be paid by the Bank on behalf of the Customer to the appointed insurance company and the same shall be debited to customer’s any account with the Bank when it’s due,
d. Comprehensive “Life Takaful” terms are available on SIB website (www.SIB.ae) which outlines details pertaining to Life takaful Scope Cover, sum insured and other Life takaful policy conditions
I declare that I have read and understood the above mentioned terms and conditions, and hereby sign