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17

Jul

Project on ABN AMRO Pakistan
by Commerce Solutions in


 


 

ABN AMRO Pakistan


 

History


Committed to Pakistan since 1948, ABN AMRO Pakistan has a strong commercial banking presence as well as an established retail franchise which offers a complete product suite including credit cards, consumer loans and deposit accounts. The bank is a leader in product innovation in the local market and is represented in key financial and government policy forums in the country. Its acquisition of Prime Bank in April this year further strengthens its position in Pakistan. With assets of PKR 124 billion, about 5,000 employees and over 80 branches in 24 cities, the combined entity is the second largest foreign bank and one of Pakistan's top 10 banks in a rapidly growing market


 

About Islamic Banking

Globally, the Islamic financial services industry stands at an estimated size of USD 380 billion and consists of more than 285 financial institutions around the world. The industry has evolved from a regional business into one of a global scale. The annual average growth rate of about 15% reflects in part the economic growth in the Islamic world.The industry has grown from commercial banking to retail banking and investment banking. Its sophistication and product offering has developed along with this change. Islamic Banking is an inclusive paradigm: not only Muslims, but non-Muslim individuals and communities are seeking ethical financial solutions. Large multinational banks are creating Islamic Banking windows in Muslim and non- Muslim countries alike. Additionally, Middle Eastern banks are converting into full-fledged Islamic Banks.


 

ABN Amro Islamic banking


 

ABN AMRO is at the forefront of this development in the global banking industry and has launched Islamic Banking operations in Pakistan and in other countries to cater for the specific needs of our customers in a Shariah compliant way. Central to this is our commitment to Shariah compliance and assurance that our products meet the highest levels of Shariah Standards. We engage a panel of Shariah experts who capitalize on their knowledge and skills to help us develop products which are not only acceptable in the local and international markets, but are also in line with the principles of Shariah.


 

The emergence of Islamic banking has made banking easy for customers interested in financial products and services which are in harmony with their religious beliefs. ABN AMRO understands the needs
of our local communities, and the ABN AMRO Islamic Banking brand is able to meet customers' desire for Shariah Complaint Solutions


 

ABN AMRO Islamic Banking is a client driven institution which provides innovative solutions to cater to genuine customer needs. Central to our customers is our commitment towards adherence to Shariah which is evident through all our practices

ABN AMRO Islamic Banking commits to deliver only the best service standards through its presence across the country.


 


 


Products


 

ABN AMRO Islamic Banking believes in premier service delivery and going an extra mile to bring superior standards that our clients can truly appreciate. We go beyond financial solutions and aim to offer clients a privileged lifestyle which they can truly value and associate with. In our Endeavour to provide the customers with products and services that suit their needs, we have team of professionals with Islamic finance expertise dedicated to developing Shariah approved financial solutions


 

The major products are:


 

  1. Deposit
  2. Home finance
  3. Commercial products


 

Deposit:

Our Islamic Banking Deposit Products illuminate your choices by providing you Shariah Compliant Solutions for a simple reason: we value what you believe in. At ABN AMRO Islamic Banking, we bring together products and services that comply with not just your needs but also your beliefs

There are three types of deposits that are following:

  1. Current
  2. Saving
  3. Term deposit


 

Savings and Term Deposit Accounts at ABN AMRO Islamic Banking have been developed under the Islamic Banking principles, Mudarabah and Mushrakah. In this arrangement, the depositors are "Raab-ul-Maal" (investors) and the Bank is the "Mudarib" (the Fund Manager) and in some instances the Investor as well.


 

Mudarabah Defined:

For us at ABN AMRO, it is about what you trust in. Thus, we have incorporated the Islamic mode of "Mudarabah". This is a type of partnership where one partner provides funds while the other partner manages those funds. Profits from this partnership are distributed accordingly.

Musharakah Defined:

working together is important for progress to commence. The Islamic mode of "Musharakah" provides another type of partnership where two or more individuals invest their funds and share the profit according to pre-defined ratios and share losses according to the ratio of investment to pre-defined ratios.


 

How do Savings and Term Deposit Accounts work?

In simple words, our Deposit products are structured in a way that the Savings and Term Deposits from our Clients go into a pool of funds maintained by the Bank. ABN AMRO Islamic Banking, as the Fund Manager (Mudarib) invests these funds into Shariah Compliant assets / investments and the resulting profit is distributed between the Bank and Depositors according to pre-defined ratios and weightings. In some cases, the Bank may also invest its funds in the pool and become a partner with the Depositors within that pool

Thus, Savings and Term Deposit Accounts function under a hybrid arrangement of Mudarabah and Musharakah


 

How do Current Accounts work?

A Current Account is operated on the basis of "Qard"; where the funds from the Depositors are treated as a loan for the Bank and no profit of any kind is payable to the Depositors but the principle is guaranteed and payable to the client on demand.


 

Profit Sharing Mechanism Explained

Client deposits collectively go into a pool of funds and ABN AMRO Islamic Banking as the Fund Manager (Mudarib) invests these funds into Shariah Compliant assets / investments. The relationship between ABN AMRO Islamic Banking and the Depositors is that of a Mudarib and Raab-ul-Maal

For example, assume we have five categories of Depositors that hold the following account types: (i) Savings (ii) 1 Month Term Deposit (iii) 3 Months Term Deposit (iv) 6 Months Term Deposit (v) 1 Year Term Deposit The Bank receives a total of Rs. 20,000 from these five categories of Depositors and each category is assigned a specific weight age:

Category

Deposit (Rs.)

Weight age

Savings 

3,000 

0.1 

1 Month 

1,000 

0.3 

3 Months 

3,000 

0.5 

6 Months 

6,000 

0.6 

1 year 

7,000 

0.7 

Total 

20,0000 

  

The profit earned by investing the funds in Islamic assets / investments is distributed between the Bank and the depositors according to weight ages announced at the start of the month

As an illustration of profit distribution ratio* between ABN AMRO Islamic Banking and the Depositors, we assume that the ratio is equal (i.e. 50 / 50 as shown in the table below) and the earned profit is Rs. 4,000, for that month. Thus, the profit will be distributed as follows:


 


 

Category

Deposit (Rs.)

Weightage

Weight age Average

Profit

Rate*

Savings 

3,000 

0.1 

300 

57 

1.89% 

1 Month 

1,000 

0.3 

1,500 

57 

5.66% 

3 Months 

3,000 

0.5 

3,600 

283 

9.43% 

6 Months 

6,000 

0.6 

4,900 

679 

11.32% 

1 year 

7,000 

0.7 

10,600 

924 

13.21% 

Total 

20,0000 

  

  

2,000 

  


 

The above profit rates and profit distribution ratio (Mudarib fee) are for illustration purposes and are not the indicative profit rates of ABN AMRO Islamic Banking. The weight ages of ABN AMRO Islamic Banking will be announced on preset dates.


 

This clearly indicates profit sharing mechanism between the Bank and the pool as well as the Depositor


 

Loss Sharing between the Bank and the Pool

In case of a loss, as per the Islamic Financing principle of Mudarabah the loss will be borne by the Raab-ul-Maal (Depositors) while the Mudarib (ABN AMRO Islamic Banking) will get nothing for its effort which will in turn be a loss to the Bank


 

Concept of Weightings
The concept of weightings is being used by Islamic Banks because we face the challenge of distributing profits among a wide variety of Depositors with varying tenures and amounts. Depositors continually close their accounts or decrease their balances with the Bank. In order to tackle this, the Bank assigns a weight age to a specific deposit based on its amount and the tenure so as to create a balance in profit returns, to these various deposit categories.


 

Ensuring Shariah Compliance
We at ABN AMRO Islamic Banking ensure that all our products strictly meet the highest standards of the Islamic Shariah. This is why we have an in-house Shariah Advisor, who is also advised by our Global Shariah Advisory Board consisting of eminent Shariah Scholars to oversee all banking transactions and business dealings.


 

Home Finance


 

With ABN AMRO Islamic Banking Home Finance, your dream of owning a house becomes a reality

ABN AMRO Islamic Banking Home Finance uses the Islamic mode of Diminishing Musharakah to offer you a bouquet of benefits and services. We guarantee you the fastest turnaround time in the market. Your dream of a new house comes true with us, with maximum ease that is the ABN AMRO hallmark. Choose the Home Finance option that best meets your needs and let ABN AMRO Islamic Banking make your dream come turn.


 


 


 


 

As an ABN AMRO Islamic Banking Home Finance customer, you are also entitled to the privileges of a complete banking relationship, such as:


 

With your Current and Savings Accounts, get your ABN AMRO Islamic Banking Relationship Card absolutely FREE! Your Relationship Card serves as an ATM / Debit Card. Use it at hundreds of outlets bearing the ORIX logo across Pakistan.

Eligibility Criteria:

  • You must be a Pakistani, between 25-62 years of age and residing in Karachi, Lahore, Islamabad, Rawalpindi, Faisalabad or Multan.
  • You must be in continuous employment, for two years or more, at the time of application.
  • Alternatively, you must have evidence of 3 years or more of business or professional experience

ABN AMRO Islamic Banking Home Buyer:

If lacks of Shariah Compliant Solutions are the reason why you haven't started looking for a home, your worries are over. Whenever you find your dream home let Home Buyer secure it for you.

It's quite simple. You can avail financing up to 80%* of the appraised value of your new home or up to Rs. 30 million, (whichever is lower).

Flexible Terms and Conditions allow you to repay at your convenience.

For greater ease, your rent remains constant over the entire term (unless rental rate is revised) and part of the monthly installment

Increases your share towards the ownership of your home.


 

ABN AMRO Islamic Banking Refinance:

If you already have a home finance facility, you may get the outstanding balance transferred to ABN AMRO Islamic Banking Home Refinance.

ABN AMRO Islamic Banking Home Builder:

Would you rather build your dream home than buy a ready-made one?

As per Islamic Banking principles, all Musharakah units will be sold at face value. In case of prepayment, the value may change*80% for salaried individuals belonging to "A" rated companies. 70% for all others unless otherwise specified.

**Appraised value is the market value of the land plus the estimated cost of construction, as determined by independent appraisal agencies.

Commercial Products

At ABN AMRO, we believe in sensitivity to our customer's needs before
they even arise. And so, at the dawn of Islamic Banking in Pakistan, ABN AMRO Islamic Banking proudly introduces an exclusive range of Commercial products

Our Commercial Products are based on the Islamic Principles of Murabaha, also known as "Cost Plus" Financing. This is a sale where the seller discloses his cost and charges a profit on top. At ABN AMRO Islamic Banking, Murabaha is a 'buy and sell' transaction between the Bank and the Client, where the Bank purchases certain goods (as required by the Client) and sells them to the Client by adding profit to the cost. Thus Murabaha is not a loan given on interest; rather it is a sale of a commodity on spot or deferred payment.

Principles of Murabaha:


The Seller (Bank) must own the commodity before selling it to the Client. The commodity must come into the Bank's possession, whether physical or constructive (through an agent). Hence the Bank's ownership of the commodity is a must

The Murabaha cannot be used as a mode of lending rather it is used when the Client needs assistance to purchase tangible assets / commodities. Therefore, Murabaha cannot be used to pay for commodities already purchased by the Client, or to pay utility bills, salaries or wages.

Murabaha is available through the following products:

Precautions
In order to ensure proper execution of the Murabaha Sale in accordance to the principles of Islamic Shariah, the following precautions are observed:

  • Murabaha Sale is only executed once the ownership of the asset / commodity has been acquired i.e. short sale and / or future sale is prohibited.
  • ABN AMRO Islamic Banking ensures that it is not a buy back transaction.


 

Services

At ABN AMRO Islamic Banking, we endeavor to make your banking experience memorable and enjoyable. We are not just your bank, but your business partner as well. It is our unique commitment to absolute service excellence that drives us forward. Our global strength enables us to provide YOU, our valued customer, a complete range of financial products and expertise.


 

The Islamic Banking Debit Card:

The Islamic Banking Debit Card is an innovative spending tool. It's an extension of your Relationship Card and functions as a complete replacement for cash.

The ABN AMOR ATM Network

You can operate your accounts from any ABN AMRO branch in the world, or through our 24-hour ATMs. Our ATM Networks are multi purpose enable you to transfer funds, withdraw cash or simply check your balance.


 

Non Stop Banking Centre

Total accessibility and convenience through ABN AMRO phone banking service with integrated Interactive Voice Response (IVR) systems in English or Urdu, 24 hours a day, 7 days a week.

Drop box facility:


Cheque deposit and loan repayments have never been easier. Simply drop a Cheque into 42 Drop box locations country wide at all branches, offsite and Fuel Stations.

E-statements:
 Convenience is just a click away. Now, with ABN AMRO, you can receive your statements on your e-mail. Which means, no paperwork to keep track of your transactions? Just access your personal e-mail account, whenever it's convenient.

Lockers:

If your jewellery has been giving you sleepless nights, and the prize bonds tucked in the bottom drawer make you feel tensed; it's time to discover a peace of mind.

Islamic Banking Debit Card

The ABN AMRO Islamic Banking Relationship Card is a ATM / Debit Card all in one giving you the facilities that you may require within the palm of your hand. It functions as a complete replacement for cash with the freedom to make instant and cashless payments at a multitude of shops, outlets and restaurants in addition to its use on our ATM network.


 

The Islamic Banking Debit Card:


The Islamic Banking Debit Card is an innovative, convenient and secure payment tool that gives a whole new meaning to spending. It completely eliminates the need to carry cash for payments and retail transactions.


 

Time    saving:

No need to visit the bank or withdraw cash from the ATM for your cash needs. With the Islamic Banking Debit
Card, you save time and the hassle of standing in queues.

Safe and sound:

The Islamic Banking Debit Card facility functions on a PIN-based mechanism, keeping your cash secure and giving you peace of mind.


 

Many choices:

When using the Islamic Banking Debit Card, you have the flexibility of accessing two different accounts! Your Current Account and Savings Account will be linked to your Islamic Banking Debit Card allowing you a payment facility like never before.


 

Get more for less:

Your daily spending limit on the Islamic Banking Debit Card allows you to make purchases up to Rs. 500,000 per day, depending on the balance available in your accounts linked to this facility.


 

Keep a record:

All payments made through the Islamic Banking Debit Card appear in your daily / monthly statements. This
makes fund management simple and effective, and helps you maintain a formalized record of all the purchases and payments you have made during the month

.

Shopper galore:

Use your Islamic Banking Debit Card at your favorite outlets and restaurants. Simply look for the ORIX Network logo • and experience the easy way to pay


 

No extra charges:

No more worries of paying service charges every time you swipe your card. With the Islamic Banking Debit Card, you pay exactly the same amount whenever you make a purchase. (A standard fee of Rs. 8/- will be applicable only on fuel purchases)


 

24-hour Customer Service:

Our 24-hour Non-Stop Banking Centre (NSBC) is there to take care of all your queries. Our well-trained and
qualified Phone Banking officers will assist you with all matters pertaining to your Islamic Banking Debit Card and account

ATM Network

ABN AMRO ATM network allow you access to your money 24 hours a day, 7 days a week, giving you flexibility to bank at your convenience. Our Offsite ATMs at all major airports, Stadium Road (Karachi), Park Towers (Karachi) and Gulberg (Lahore) are the symbols of our commitment to you.

Everyone with a Relationship Card (ATM/Debit) can use the ATM. All you need is the Relationship/ATM/ Debit Card number mentioned on the front of your card and your personal identification number (PIN). Learn how to use your card step by step by visiting How to use the ATM

Some key benefits of the ABN AMRO relationship card are the diverse functions and services available to you entitling you to a host Debit Card features since your card is recognized by numerous shops and restaurants in Pakistan providing you fabulous discounts and deals services.

Your Relationship Card enables you to perform the following functions on the ATM:


Your relationship card is also the key to the largest network of ATMs across Pakistan. Feel free to explore Pakistan since you may access your funds from over 1350 ATMs country wide using the 1LINK or MNET networks. Cash withdrawals could never have been easier but that is not all! You may also transfer funds to another bank using to Inter-Bank Funds Transfer, just look for 1LINK logo and experience unprecedented convenience. and flexibility.

Your relationship card empowers you to bank across the globe. The Cirrus facility gives access to your cash at over 900,000 ATMs all over the world. Just look for the Cirrus logo displayed on or near the ATM. To locate a Cirrus ATM in any part of the world, visit the link Cirrus/MasterCard ATM locator

Non-Stop Banking Centre

ABN AMRO Non-Stop Banking Centre offers personalized self-service and dedicated Phone Bankers catering to all your banking needs 24 hours a day, all year round, even on Sundays and public holidays.

Convenient and Accessible
Personalized banking from wherever you are - 24 hours a day, 7 days a week


 

Fast and Simple
Instant banking services providing you the flexibility to bank on your own terms


 

Safe and Secure:

Countrywide access to a variety of products and services using your unique T-PIN through a simple phone call

The ABN AMRO Interactive Voice Response system (IVR) offers extensive facilities ensuring greater flexibility, privacy and ease of use. Our Phone Banking Officers are well equipped to guide you on various inquiries and transactions pertaining to your accounts.

Make payments, order demand drafts, stop a Cheque or pay your telephone, gas and mobile bills. You can do almost all your banking transactions over the phone, at the push of a button!

Forget about rushing off to the bank during office hours or waiting in queues - switch to banking that's quick, secure and so very convenient. Use your land line or mobile phone and dial111-06-06-06 to experience Phone Banking with a difference

Drop Box Facility

Cheque Deposits and payments of your Home Finance installments have never been easier. With the drop box facility, you get the convenience of banking,
24 hours a day, 7 days a week.

All you have to do is follow this simple three step process to experience true banking convenience:

Step 1
Put your cheque in the drop box envelope and seal it. (Cash and Post-Dated cheque are not accepted via drop box).

Step 2
Fill in the drop box envelope (placed at all drop boxes nationwide) with
required information.

Step 3

Slip the drop box envelope into the drop box. (Please allow 3 working days after depositing your cheque for the amount to be credited).

Located at all ABN AMRO branches, ATM off-site locations and selected Shell and PSO stations, our drop boxes offer you hassle free and secure cheque deposit.

E-statements

The ABN AMRO E-Statement service is a state-of-the-art facility, which virtually allows you to keep track of all your banking transactions. You can receive your account statements directly in your e-mail. Just access your personal e-mail account, whenever convenient for you.

Our E-Statement facility enables you to view Current or Savings Account activities, 24 hours a day, 365 days a year, from anywhere in the world.

Totally free:
this facility comes to you at no extra cost. All you need is a personal e-mail address to which your statements will be sent. If you do not have an e-mail address, you will continue to receive statements by mail as subscribed

Multiple Addresses:
you may choose to get your E-Statements at more than one e-mail address (up to 3 addresses)

Additional Security:
while printed statements run the risk of being misplaced, statements sent to your e-mail are more secure

Lockers

If your valuables tucked in the bottom drawer are giving you sleepless nights, it's time to discover peace of mind.

ABN AMRO Lockers are safe, convenient and private. As an ABN AMRO customer, you can enjoy personalized service and operate your locker in a friendly and pleasant environment.

At ABN AMRO Islamic Banking our lockers provide you the assurance you require, guided by the expertise of Shariah Scholars who have incorporated Islamic Principles in to an array of custom-made financial solutions.

Locker size and fees*: 

Small 

Rs. 2,000 per year

Medium  

Rs. 3,000 per year 

Large  

Rs. 4,000 per year 

Extra Large 

Rs. 5,000 per year 

There will also be a refundable key deposit of Rs. 2,000/-

Locker Insured
In an effort to further enhance this service, we have taken out an insurance cover on your locker for an amount up to Rs. 1,000,000.

Locker Insurance Coverage 

Small  

Rs. 500,000/- 

Medium 

Rs. 750,000/- 

Large/Extra Large 

Rs. 1,000,000/- 

This insurance plan provides cover on the following risks

 

  

Robbery

 

  

Fire 

 

  

Natural Calamity 

 

  

Vandalism 

 

  

Terrorism 

 

  

Applicable on each locker. 

 

  

Only events that take place in the locker area are covered under this scheme 

So put your valuables in a safe place and sleep well!