DIPLOMA IN ACCOUNTING

ISLAMIC FINANCIAL AND ACCOUNTING CONCEPT (UDE2010)

Individual Assignment
OCBC AL-AMIN BANK

Prepared By
RACHEL BINTI ABDULLAH (UDE180211)

Prepared For
MADAM.NORJIHAH MOHAMMAD YUSOF

Date of Submission
21 MAY 2021

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INTRODUCTION
OCBC Bank, Singapore's oldest bank, was founded in 1932. It became one of the world's largest
banks by the amalgamation of three local financial institutions: the Chinese Commercial Bank
Limited, the Ho Hong Bank Limited, and the Oversea-Chinese Bank Limited. Singapore's oldest
financial institution is OCBC Bank. Since its founding in 1994, OCBC Bank (Malaysia) Berhad
(“OCBC Malaysia”) has grown to become one of Malaysia's major international banks by most
metrics. In 2008, its Islamic banking subsidiary, OCBC Al-Amin Bank Berhad (“OCBC Al-
Amin”), became the first Singapore-based Islamic bank to operate in Malaysia. OCBC Al-Amin
Bank is one of subsidiary of OCBC bank which is introduced in Malaysia that offers Islamic
banking services and products. OCBC has offered Islamic banking products since 1995. Finally,
on December 1, 2008, OCBC Al-Amin Bank Berhad was established. OCBC Al-Amin provides
products and services in accordance with the appropriate Shariah contract and with the
permission of the Shariah Advisory Committee. OCBC Bank and its subsidiaries offer a variety
of specialised financial services, including commercial, corporate, investment, family, and
transaction banking, as well as treasury, insurance, asset management, and stockbroking.

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 1. PRODUCTS AND SEEVICES OF OCBC AL-AMIN BANK
OCBC Al-Amin offers a full range of Islamic banking products and services to manage
customers wealth. There are two division of services which are personal banking and business
banking.

PERSONAL BANKING
1. DEPOSIT
I. Mumtaz Current Account-i
Mumtaz Current Account is a standard Islamic Current Account with the added benefit of a
checking account for clients' preferred transactions. This storey is based on the Islamic contract
of Qard. A qard is a contract in which a lender lends money to a borrower in exchange for the
latter repaying an equal amount to the lender. Deposits or cash received under Mumtaz Current
Account-i shall be maintained and invested in Shariah Compliant Assets, according to Shariah
Compliant. A Mumtaz Current Account-i must be opened with an introducer. This account does
not provide the account holder with hadiyyah (profit). When customers open a Mumtaz Current
Account-i, customers receive a complimentary cheque book. With the check book, account
members may easily pay bills and make retail transactions. Account holders may now view their
account activity and balance at anytime, anywhere because of arrival of online banking services.
Account holders can also perform online transactions such as paying bills and transfer money to
other account. Individuals must be at least 18 years old. The product is open to Malaysians,
permanent residents, and foreigners at the discretion of the bank. Malaysians and permanent
residents must provide a minimum deposit of RM500, with the sum increasing to RM1,000 for
foreigners to open this account.
II. Aqil Savings Account-I
This account is about receive earnings from attractive profit rates with this Islamic basic
savings account. OCBC will use customers deposits to invest in shariah-compliant assets
while also safeguarding customers wealth. Customers will also have the convenience of
unlimited withdrawals with no transaction fee charge to customers' accounts. The savings
received through the Aqil Savings Account-i will be handled and invested in Shariah-
compliant transactions. To kick start the OCBC Al-Amin Aqil Savings Account-i, customers
will need a minimum of RM20 as an initial deposit. they may apply for this Islamic savings
account if they are 18 years old and above. For minors of 12 years old and below, it must be
opened as a trust account opened under a legal guardian or parent's name. The best part of
this basic savings account is earning exciting return rates (Hiddayah). Not only will receive
monthly profit returns, they could enjoy a yearly bonus of 5% provided that they make no
withdrawals for the next 12 months starting from the 31st of December of each year.

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 III. Imad Young Savings Account-i
This account help customers child for the future and cultivate a habit for saving with this
Shariah-compliant savings account which promises to protect their money and offer
attractive saving rates as a reward. In return, the Islamic banking institution will use cash
deposit from their savings account to invest in Shariah-compliant assets. The focus of this
savings account is to earn profit returns on their wealth. Not only that they will receive
monthly returns, they will receive a yearly bonus of 5% if they do not make any withdrawals
for 12 months. OCBC aim is to give encouragement to students to excel academically by
offering cash rewards to students. The child will stand a chance to win cash if he or she ace
their public examination such as UPSR, PMR, SPM, and STPM. They will need to put in at
least RM500 to set up their OCBC Al-Amin Imad Young Savings Account-i. However, only
RM1 is required for a student under the National School Adoption Programme. Anyone
below the age of 18 years old are encouraged to apply. For those who are aged 18 years and
below, they can apply for one as long as they have an existing trust account under a legal
guardian/parent's name. For the record, this account is only available to one beneficiary for
one in-trust account.

2. FINANCING
I. Manarat Home-I
This is a Shariah-compliant Islamic mortgage loan based on the Shariah concept of Ijarah
Muntahiah Bi Al-Tamlik. It relates to a leasing arrangement in which the lessor (the Bank)
transfers ownership of the leased asset to the lessee (customer) at the expiration of the Ijarah
period. In exchange for a payment of rent, consumers are allowed the right to occupy the home
they are purchasing. Customers will progressively raise their share of the property by sustaining
their minimum repayments until the expiration of the financing period, at which point they
would own the house. Customers will be sold the property by OCBC Al-Amin in a separate
transaction. Customers obtain ownership of their home after paying off their mortgage in full.
There are three packages to pick from: idaman-i, impian-i, and warisan-i. Idaman-i is an Islamic
mortgage plan with variable interest rates designed for first-time property owners. Impian-i is a
semi-flexi Islamic home loan package designed for those who want to refinance their house for
improvement or reinvestment. Warisan-i is an Islamic house finance package for people who
have a solid financial foundation. In terms of mortgages, clients can apply Mortgage Reducing
Term Takaful (MRTT) to assist pay off the balance of their housing loan if anything unforeseen
occurs to them, allowing their family members to avoid bearing the repayment burden.

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 3. TAKAFUL
I. Supreme-i
Supreme-i is a takaful product underwritten by Great Eastern Takaful Berhad. This product is
distributed by OCBC Al-Amin Bank Berhad. Supreme-i is a limited pay universal Takaful plan
with two contribution payment terms that offers Guaranteed Cash Payment (GCP) and
Guaranteed Maturity Benefit (GMB). There's also satisfaction, with coverage for death or total
and permanent disability (TPD). Customer can choose either 5- or 7-years contribution payment
term for a 13 years coverage term. With Supreme-i, customer will receive a percentage of their
Annualized Contribution at the end of each certificate year as your Guaranteed Cash Payment.
GCP will last until death, TPD, surrender, or maturity of their certificate, whichever comes first.
This is provided that the complete payment for the applicable year, as well as any late
contributions, be paid.
II. Group Credit Family Takaful (GCFT)
Group Credit Family Takaful (GCFT) is a short-term family Takaful for personal financing
product. It is a single contribution term Takaful product that provides a lump sum benefit
payment in the event of Death or Total & Permanent Disability of the Person Covered.
Underwritten by Great Eastern Takaful Sdn Bhd.
III. Mortgage Reducing Term Takaful (MRTT)
The Mortgage Reducing Term Takaful (MRTT) program is intended to offer takaful safeguards
for Islamic banking house loan clients in the event of death or Total Permanent Disability (TPD).
The benefit is the amount of the reducing sum covered multiplied by the initial sum covered. To
get the maximum benefits of this product, the period and sum assured should be comparable with
the funded amount and length of the authorized Islamic financing arrangement. The lowest age
to apply for this takaful is 19 years old, and the maximum age is 68 years old (without a
construction time), 67 years old (for a two-year construction phase), and 66 years old (for a
three-year construction period).

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Business Banking
1. DEPOSIT
I. Current account
Current Account-i is derived on the Shariah idea of Qard, which is defined as a contract in which
a lender loans money to a borrower who is bound to return the lender an equivalent replacement
value. As a thank you, the bank will present you with a 'hadiyyah' or benefit at its own discretion.
OCBC Basic Current Account members have access to over 10,000 ATMs nationwide.
Customers should not be anxious while crossing the border because they will be able to
withdraw money for free from any ATM in both Singapore and Malaysia. Cardholders can
withdraw funds from any Visa Plus ATM globally for a nominal fee. In addition, with cash and
cheque deposit machines accessible at the majority of OCBC locations, consumers may avoid
long waits at the bank and deposit monies quickly. Malaysians and permanent residents must
provide an RM500 deposit, while foreigners must put a RM1,000 deposit. It is required to give
an introducer. The introducer must have had a current account for at least a year, either as an
individual or as a business entity.
II. Cekal current account
This product is based on the Shariah concept of Tawarruq, which refers to the acquisition of an
asset owned and in control of a seller for a delayed price, followed by the purchaser cash selling
the asset to a person other than the seller for the purpose of acquiring cash Malaysians and
permanent residents need to provide a minimum deposit of RM500, while foreigners must pay a
deposit of RM1,000. It is critical to give an introducer. The introducer must be a current account
holder for at least a year, either as an individual or as a business entity.
III. Time deposit-I
This product is based on the Shariah idea of Tawarruq and comprises two selling and purchasing
contracts. The first entails a vendor selling an item to a customer on a delayed basis. The seller of
the initial transaction would sell the same product on a cash and spot basis to a third party in
order to obtain cash. Each Tawarruq sale and buy transaction is legally binding and cannot be
broken by either of the contracting parties forever. The main underlying core of all Tawarruq
selling and purchasing contracts is the transfer of possession of the item from the seller to the
purchaser for a price.
2. FINANCING
I. Term financing-i
This product based on shariah concept which is Commodity Murabahah (Tawarruq). This
product. Commodity Murabahah or Tawarruq is the Shariah contract used for Commodity

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Murabahah Term Financing-i (CMTF-i). It is a form of selling with a increase price in which the
customer pays over a certain longer period. The underlying asset for the Customer-Bank selling
transaction will be a specified marketable Shariah-compliant commodity. There are four types of
assets used in this product such as residential properties, commercial properties, industrial
properties and business assets.
II. Ijarah cash line facility
Cash Line-i is an Islamic Overdraft facility, which is a financing issued under a current account
that allows the customer to withdraw on the account up to an allowed amount. Ijarah is the
Shariah contract used for Cash Line-i to satisfy company working capital requirements. CL-i will
provide customers freedom in how they use their credit facilities, making them suited for
financing working capital requirements and contract finance to adapt to their everyday
transactions.
III. Equipment financing
 Industrial Hire Purchase-i
An asset finance facility for equipment, machinery, or goods trucks with a maximum allowable
burdened weight greater than 2,540 kg for commercial usage and Shariah-compliant reasons. It is
based on the Shariah idea of Al-Ijarah Thumma Al-Bai, which denotes a hiring or lease that ends
with the transfer of ownership. The bank purchases the appropriate asset and rents it to the client
for the agreed-upon amount of time. The consumer pays the bank rents during the leasing
duration. The rental payment includes the cost to the bank of purchasing the asset as well as the
bank's profit margin. The bank retains ownership of the asset, which serves as a security for the
facility.
 Al-Amin Hire Purchase-I
An asset financing facility to finance Act Goods covered by the First Schedule of the Hire
Purchase Act 1967, which is subject to the Bank's discretion for Shariah-compliant business
usage. Financing tenure for this product is up to 7 years but it is subjectt to the Bank’s discretion.
 Equipment Financing-I
An asset financing facility used to finance the acquisition of equipment, machinery, or
automobiles for commercial usage and Shariah-compliant reasons. The Shariah principle of Bai'
Bithaman Ajil lies at the heart of it. This refers to the selling of assets on a delayed payment
basis, in which the bank purchases the customer's asset and then sells it back to the client at a
mark-up agreed upon by both parties. For this product, the financing tenure is up to 5 years.

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CONCLUSION
OCBC Al-Amin Bank Berhad (OCBC Al-Amin) was founded in 2008 as a wholly-owned
subsidiary of OCBC Bank (Malaysia) Berhad to expand the Bank's efforts in Islamic banking,
more than a decade after the Bank initially began delivering Shariah-compliant banking products
and services in 1995. OCBC Al-Amin provides both Muslims and non-Muslims with a diverse
range of competitive and innovative financial products and services, including consumer,
corporate, treasury, investment, and transaction banking. OCBC Al-Amin is part of the OCBC
Group, which has its worldwide headquarters in Singapore. The Group has approximately 600
branches and overseas subsidiaries spread throughout 18 countries and regions, including
Singapore, Malaysia, Indonesia, and China.

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References
Banking, O. B. (n.d.). Retrieved from https://www.ocbc.com.my/business-banking/

Equipment Financing . (n.d.). Retrieved from

https://www.ocbc.com.my/ocbcal_amin/bb_financing_equipment_financing-
i.shtml#Industrial_Hire_Purchase-i

Malaysian International Islamic Finance Centre. (n.d.). OCBC Al-Amin Bank. Retrieved from
http://www.mifc.com/index.php?
ch=ch_contents_directory&pg=pg_dir_provider&ac=471&sec=02#:~:text=OCBC%20Al
%2DAmin%20Bank%20Berhad,products%20and%20services%20in%201995

OCBC Al-Amin. (n.d.). Commodity Murabahah Revolving. Retrieved from

https://www.ocbc.com.my/ocbcal_amin/bb_financing_revolving_credit_i.shtml#Revolving
_Credit-i

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