Personal Finance

The Personal Finance product by Emirates Islamic is a Shari'a compliant solution which is based on the purchase and sale of certificates called EI Funding Certificates (“Certificates”)..

The Certificates are Shari'a compliant Certificates deposited in Nasdaq Dubai. The value of each certificate is USD 10.00-. The Certificates represent a common share in Shari'a compliant assets such as e.g. Sukuks, equity, real-estate assets etc.

Murabaha is a form of Shari'a compliant sale contract whereby Emirates Islamic (as a seller) sells the Certificates to the customer for a price equal to the Certificate Cost (the finance amount) plus the Murabaha Profit.

The Murabaha offer for Personal Finance is valid for three (3) hours from the time you receive the email.

On expiry of the cut-off time, if we do not receive a response from you, Emirates Islamic will consider the Murabaha offer for Personal Finance is accepted by you.

Once the Murabaha Sale is executed the Customer then has 2 options:

• Option 1: Advise us of your custody account number with Emirates Islamic Financial Brokerage L.L.C. to which the Financing Asset will be transferred upon completion of the Murabaha Contract; or
• Option 2: To authorize Emirates Islamic Financial Brokerage L.L.C. to sell the Financing Asset to a third party on your behalf and transfer the sale proceeds thereof into your account with EI.

The Customer has full liberty to choose any of the above 2 options to complete the trading process.

If you have not chosen any of the above options by the Cut-off Time, then Emirates Islamic through Emirates Islamic Financial Brokerage L.L.C. will sell the Certificates owned by the Customer to another party and transfer the sale proceeds to your Emirates Islamic account.

Note: In order to get the funds, Customer has to opt for option 2.

• A Personal Loan is money you borrow and pay back with low interest or high interest over multiple years.
• However Personal Finance is a Shari’a Compliant contract based product, where the bank sells an asset at a profit, as Islamic Banks are prohibited from charging interest. So this product is Riba free.

• An Islamic Bank offers liquidity - in a Shari’a compliant way - to the customer, which can help him settle his outstanding debt with another bank.
• However Conventional Banks buyout the loan without any Shari’a arrangement.

As per Shari’a, it is impermissible to buy a loan at discount or at premium.

• Conventional Bank is a financial body which receives money from the depositors against fixed rate of interest and it offers liquidity to borrowers against interest. And it is governed by conventional banking laws.
• Islamic Bank is a financial body which executes commercial contracts likes sale, leasing, construction and are governed by Islamic Banking laws which allow for financial bodies to carry on commercial activities for profitable purposes.

• As per Loan arrangement, the borrower needs to return to the lender exactly from whom they borrowed.
• However Financing is a commercial contract based on sale, leasing or construction.
• All banking products offered by Islamic banks are based on financing.

• Borrower is a person (or entity) who borrows money from someone else.
• Financee is a person who agrees to settle a deferred price payable upon execution of a sale or leasing contract.

• Interest is any increment earned over and above the repayment of loan amount which is not permissible as per Shari’a.
• Profit is any additional revenue generated through various trade activities. Earning profit is permissible as per Shari’a.

An Islamic Bank does not earn any interest on its financings, rather it generates profits through entering into various commercial activities like sale & purchase, leasing, construction etc.

• Borrower in a conventional bank undertakes to pay a penalty in case he delays in settling installments on due dates. These amounts are taken as additional profits for the Bank.
• Financee in an Islamic bank that undertakes to pay an extra amount which goes for charitable purpose and the Bank does not benefit from these amounts.

• Installments paid by the Finance Customer in an Islamic Bank represents payment of the sale price, lease rentals or service charges.

However, installments paid by a Borrower in a Conventional Bank represents repayment of a previously taken loan.