Shariah Banking Now Available In Thailand

[george]

Shariah banking now available

BANGKOK: -- Muslim clients of Krung Thai Bank now have facilities available that conform to religious beliefs

Muslim clients of Krung Thai Bank now have a new option when it comes to personal financing. In the past, some Muslims may have been reluctant to go to the bank, fearing that the banking procedure may not strictly follow Islamic procedures, but Krung Thai Shariah Banking services has recently launched personal financing that follows the Shariah procedures catering specifically to the Muslim population.

Dheerasak Suwannayos, adviser to the board of Krung Thai Shariah Bank, said that the bank had launched five new personal services which strictly follow Shariah principles. He said the Shariah principles highlight compassion, generosity, fair play and justice.

As one of the Shariah beliefs is that money speculation is not an appropriate way to do business, the bank will basically buy the service and re-sell it to clients at a fixed cost.

The five services are designed specifically for Muslims and staff of Muslim schools, but they are also available to people of all religions.

First, “bai bithawaman ajil” home financing is for clients who want a house. Krung Thai Shariah Bank will buy the house and re-sell it to the client by setting a fixed-interest payment.

The interest payment will be fixed at, for instance, 7.25 per cent over a period of 30 years. The clients will be able to calculate the cost without the burden of risks of interest fluctuations.

If the market rate becomes much lower than the rate that the bank is charging the clients, the bank will re-weigh the interest cost and return it to the clients to ensure the fair-play principle is followed.

Secondly, the “Shariah revolving facility” is to offer cash flow to clients. The bank will approve an amount of money as credit for a customer based on the client’s income, but the client must use the money for positive purposes.

The bank can withdraw the credit imme-diately if it finds that the customer is using the money for the wrong purposes, even though the client is still be able to service the debt.

For instance, clients cannot use the money to buy alcohol. The default criteria are therefore different from normal commercial banks.

Third, the bank also offers an “ethical cash advance” to clients who want to spend the money for a good cause. For example, if they want money to attend a seminar or training or want to finance education fees for their children.

Clients who can pursue education at the post-graduate level can seek credit of Bt300,000, with a seven-year payment and a grace period of two years.

Fourth, the “BBA Umrah and Tour Package Finance” service is for Muslims who want to go on pilgrimage trips – “Umrah” – in Saudi Arabia. The bank can provide for the tour package, including the religious service programme, and lend to clients an amount of 80 per cent of the expense – but not more than Bt80,000 each. The money should be paid back in three years.

Fifth, “BBA motor vehicle financing” for clients who need to buy vehicles to use in their daily lives. The bank will approve money

for passenger cars up to 1,600cc only and trucks up to 3,000cc because vehicles with bigger engines are considered luxuries. The repayment period is five years.

Dheerasak said one of the advantages of the services is that the clients can cal-culate the cost of the payment because of the fixed interest. To ensure that the money won’t support businesses that monopolise, speculate, are involved in drugs or alcohol or run against good morals, the bank’s Shariah Committee will consider loan applications once a week.

--The Nation 2004-07-26

[PvtDick]

Nothing new, really. The Islamic Bank of Thailand (Islamic Bank of Thailand) opened for business two years ago, and now has many branches throughout the country.

[george]

So what would be the advantages for an expat in Thailand to use a muslim banking service?

[PvtDick]

None, as far as I can see. Unless you're a Muslim.

[Pepe']

I have spoken with some Thai monks locally here in San Diego that were quite uncharacteristically angry about the PM not allowing the formation of a Buddhist branch of banking and apparantly deffering to the Muslims.

It seemed like quite a heated issue. It seems the PM is not popular with Thai monks here in any department from what I here.

[PvtDick]

As far as I know, there is nothing in Buddhist doctrine which would necessitate a separate set of banking standards. Islam, on the other hand, has several rules about how money -- specifically interest -- must be handled.

[JimGant]

Fourth, the “BBA Umrah and Tour Package Finance” service is for Muslims who want to go on pilgrimage trips – “Umrah” – in Saudi Arabia. The bank can provide for the tour package, including the religious service programme, and lend to clients an amount of 80 per cent of the expense – but not more than Bt80,000 each. The money should be paid back in three years

And if the pilgrimage is to Afqhanistan, 100% will be lent. And interest will be paid on a sliding scale, dependent upon how many Infidels are dispatched.

[snoophound]

Just another way to keep the cancer spreading in Thailand

[Dakhar]

Monkey see Monkey do....

This has been going on in America for a looooong time. We fortunate people of America cater to the "Latino's" of America....

Even our current president tries to speak Spanish to win their praises....

Well, we stole America from the native indians, I guess it is time to have it stolen again....