Thai Islam Bank Offering 3.4% Interest Per Month?

[BuffaloRescue]

Ive just been reading some promotional material from Thai Islamic bank. Apparently if you get a 9 month term deposit, minimum of 100,000b .. you get 3.4% interest per MONTH?

Sounds completely impossible. If this is the case Im going to sell everything I own and put money in there.

What is the catch? Sorry cant get any sense out of them and I dont speak thai - just thought someone might know here. Thanks

[rubberduck]

Sounds pretty immoral to put your money on a religious bank like that

[Thaddeus]

Sounds pretty immoral to put your money on a religious bank like that

But prophets are going strong.

[Beetlejuice]

Sounds pretty immoral to put your money on a religious bank like that

But prophets are going strong.

[breadbin]

Is it true? 3.4%!

I'd have some for 9 months.

[BuffaloRescue]

Information

The Islamic Bank of Thailand was set up by the Islamic Bank of Thailand Act B.E. 2545 (2002), as a state enterprise under the Ministry of Finance, administered by a board of governors, with an advisory council on Islamic banking. The bank operates in accordance with the rules of Sharia, or the Islamic rules on transactions.

The basic principle of Islamic banking is the sharing of profit and loss and the prohibition of the payment of fees for the renting of money, or businesses related to profiteering, monopolizing, or vices. In an Islamic hire-purchase transaction, instead of loaning the buyer money to purchase the item, the bank buys the item from the seller, and resells it to the buyer at a profit, while allowing the buyer to pay the bank in installments, while asking for strict collateral. The bank customer thus pays a monthly fixed amount, making his financial planning easier.

There are presently 26 branches of the Islamic Bank of Thailand, scattered in all regions of the country. Pattani has two branches, one in the city, the Pattani Branch, and Chabang Tiko Branch in Chabang Tiko subdistrict, in Mueang district of Pattani, both making a substantial profit each month.

[BuffaloRescue]

They are advertising that non-islams are welcome too apparently

Edited April 27, 2013 by BuffaloRescue

[Thaddeus]

Information

The Islamic Bank of Thailand was set up by the Islamic Bank of Thailand Act B.E. 2545 (2002), as a state enterprise under the Ministry of Finance, administered by a board of governors, with an advisory council on Islamic banking. The bank operates in accordance with the rules of Sharia, or the Islamic rules on transactions.

The basic principle of Islamic banking is the sharing of profit and loss and the prohibition of the payment of fees for the renting of money, or businesses related to profiteering, monopolizing, or vices. In an Islamic hire-purchase transaction, instead of loaning the buyer money to purchase the item, the bank buys the item from the seller, and resells it to the buyer at a profit, while allowing the buyer to pay the bank in installments, while asking for strict collateral. The bank customer thus pays a monthly fixed amount, making his financial planning easier.

There are presently 26 branches of the Islamic Bank of Thailand, scattered in all regions of the country. Pattani has two branches, one in the city, the Pattani Branch, and Chabang Tiko Branch in Chabang Tiko subdistrict, in Mueang district of Pattani, both making a substantial profit each month.

So basically, it's a bank.

[BuffaloRescue]

http://investvine.com/thai-islamic-bank-hit-by-bad-debts/...

but it does say it is "state owned" at the end of this

[soi41]

Non Performing Loans at around 30% Normal if a bank have NPL's around 4%, it is considered high !

It seems like our sharia brothers are taking "sharing loss and profit" a little too litterally! When the news broke a couple of months ago, about the NPL's, people were queueing to take their money out! So prophets or not, stay away, not hal-al !

[NeverSure]

Non Performing Loans at around 30% Normal if a bank have NPL's around 4%, it is considered high !

It seems like our sharia brothers are taking "sharing loss and profit" a little too litterally! When the news broke a couple of months ago, about the NPL's, people were queueing to take their money out! So prophets or not, stay away, not hal-al !

Yep, that bank also called the IBank is belly up and has been having runs on it by panicked customers. It has asked the government for a bailout.

Another Thai bank, SME, has asked the government for a bailout.

I wouldn't have a single baht in a Thai bank right now. Nor would I have in real estate or the stock market.

Link

[soi41]

Non Performing Loans at around 30% Normal if a bank have NPL's around 4%, it is considered high !

It seems like our sharia brothers are taking "sharing loss and profit" a little too litterally! When the news broke a couple of months ago, about the NPL's, people were queueing to take their money out! So prophets or not, stay away, not hal-al !

Yep, that bank also called the IBank is belly up and has been having runs on it by panicked customers. It has asked the government for a bailout.

Another Thai bank, SME, has asked the government for a bailout.

I wouldn't have a single baht in a Thai bank right now. Nor would I have in real estate or the stock market.

Link

What a load of crap! I guess, that even you have noticed the strength of the Thai baht, caused by strong cashinflows from proffesional investors abroad. But ofcourse you know something, that the rest of us mortals don't know?? Q1 result are just ready from all Thai banks, and with exception of the 2 mentioned, they are all doing extremely well .

As for the SET, last year + 36% and so far this year up more than 10%, with good dividends from most companies. Realestate are as we all know, location, location, location.

Yes it can all go south, the world is a dangerous place, but without a ticket, no lotterywin!

Time to turn in, it is late. And despite (or because of) being fully invested in Thailand, I sleep very well!

Goodnight

[BuffaloRescue]

Non Performing Loans at around 30% Normal if a bank have NPL's around 4%, it is considered high !

It seems like our sharia brothers are taking "sharing loss and profit" a little too litterally! When the news broke a couple of months ago, about the NPL's, people were queueing to take their money out! So prophets or not, stay away, not hal-al !

Yep, that bank also called the IBank is belly up and has been having runs on it by panicked customers. It has asked the government for a bailout.

Another Thai bank, SME, has asked the government for a bailout.

I wouldn't have a single baht in a Thai bank right now. Nor would I have in real estate or the stock market.

Link

What a load of crap! I guess, that even you have noticed the strength of the Thai baht, caused by strong cashinflows from proffesional investors abroad. But ofcourse you know something, that the rest of us mortals don't know?? Q1 result are just ready from all Thai banks, and with exception of the 2 mentioned, they are all doing extremely well .

As for the SET, last year + 36% and so far this year up more than 10%, with good dividends from most companies. Realestate are as we all know, location, location, location.

Yes it can all go south, the world is a dangerous place, but without a ticket, no lotterywin!

Time to turn in, it is late. And despite (or because of) being fully invested in Thailand, I sleep very well!

Goodnight

Fair point..

Apparently this iis guaranteed by the government.. although havent read the fine print.

[roamer]

You don't have to read the fine print, it's a Thai government guarantee

[NeverSure]

You don't have to read the fine print, it's a Thai government guarantee

The bank is also owned by the Thai government, so it's double safe. These are the same geniuses who brought Thailand the failed rice scheme, the new minimum wage, easy car loans and no-down home loans.

Edited April 27, 2013 by NeverSure

[slapout]

A fellow explained the inflow of money to a few of us old geezers the other day.

A lot of this is ill gotten money which has been held outside Thailand for the benifet of the corrupt. With the anti laundering overhaul the banks are going to impose, people are moving funds back so they will have easier access to the funds.

I did note this self proclaimed expert and his theories, yes there were more, had consumed about a bakers dozen, good stiff drinks. But he was buying for the audience, so we were duty bound to half way listen.

[daoyai]

Because usery or interest on loans is haram, they found a loophole, religion is endlessly amusing.

[slapout]

You don't have to read the fine print, it's a Thai government guarantee

The bank is also owned by the Thai government, so it's double safe. These are the same geniuses who brought Thailand the failed rice scheme, the new minimum wage, easy car loans and no-down home loans.

To put the guarantees, promises,that this government, of relatives, cronies, etc of the one in self imposed exile, into prespective, El defacto leader promised a corrupt free police force, within 4 years, back in the early 90's. "Sounds too good to be true, and if it walks, talks, and looks, like a duck", come to mind.

[Sophon]

Back to the OP's question, what makes you think that you would receive 3.4% per month? The conditions says:

< Thai language removed, this is the English Language side of the forum, English is the only acceptable language. If you want to post in Thai, you can do so in the Thai Language forum. >

3.40%

I don't read Thai but a little help from Google translate (which I admit should not be relied upon, so I had my girlfriend confirm it) indicates that the highlighted bit in parenthesis means per year/p.a. So yes, you are paid monthly but at a rate equivalent to 3.4% per annum - not 3.4% per month.

Also note that the bank uses the expression "expected return", so it sounds like it might not be a guaranteed rate?

Sophon

Edited April 29, 2013 by metisdead

[Naam]

Back to the OP's question, what makes you think that you would receive 3.4% per month? The conditions says:

< Thai language removed, this is the English Language side of the forum, English is the only acceptable language. If you want to post in Thai, you can do so in the Thai Language forum. >

3.40%

I don't read Thai but a little help from Google translate (which I admit should not be relied upon, so I had my girlfriend confirm it) indicates that the highlighted bit in parenthesis means per year/p.a. So yes, you are paid monthly but at a rate equivalent to 3.4% per annum - not 3.4% per month.

Also note that the bank uses the expression "expected return", so it sounds like it might not be a guaranteed rate?

Sophon

the rate is of course per annum and Sharia law forbids what is commonly known as "interest". that's why "expected return" is used.

[doggie888888]

Sounds pretty immoral to put your money on a religious bank like that

It is more moral to put your money in western banks that basically was the cause of the gfc, resulting in suffering for millions of people?>_>

[BlackPuddingBertha]

"Thai Islam Bank Offering 3.4% Interest Per Month?"

Sure. And a free roast pork sandwich with every new account.

[yoshiwara]

In theory whatever interest rate a bank offers on deposits it is because that bank expects to get a higher return lending that money out in return. The higher the rate the higher the return and the higher the risk. Icelandic banks (remember them?), Cyprus banks (remember them?) used to offer higher returns. Now if a bank offers returns which appear completely disconnected from any conceivable rate they are going to lend out on, then there should be a red flag. It means they are scrambling for capital funds and are being refused funds from other banks except at the most exorbitant rates. It is unfortunate that those who are chasing higher returns ("I'll have a slice of that!") will be first in line complaining that they were cheated by the system if/when it turns ugly.

Edited April 28, 2013 by yoshiwara

[itchybum]

Wonder if they would loan me money for a bacon farm.

[NeverSure]

Non Performing Loans at around 30% Normal if a bank have NPL's around 4%, it is considered high !

It seems like our sharia brothers are taking "sharing loss and profit" a little too litterally! When the news broke a couple of months ago, about the NPL's, people were queueing to take their money out! So prophets or not, stay away, not hal-al !

Yep, that bank also called the IBank is belly up and has been having runs on it by panicked customers. It has asked the government for a bailout.

Another Thai bank, SME, has asked the government for a bailout.

I wouldn't have a single baht in a Thai bank right now. Nor would I have in real estate or the stock market.

Link

What a load of crap! I guess, that even you have noticed the strength of the Thai baht, caused by strong cashinflows from proffesional investors abroad. But ofcourse you know something, that the rest of us mortals don't know?? Q1 result are just ready from all Thai banks, and with exception of the 2 mentioned, they are all doing extremely well .

As for the SET, last year + 36% and so far this year up more than 10%, with good dividends from most companies. Realestate are as we all know, location, location, location.

Yes it can all go south, the world is a dangerous place, but without a ticket, no lotterywin!

Time to turn in, it is late. And despite (or because of) being fully invested in Thailand, I sleep very well!

Goodnight

Good night? Are you asking for your teddy bear?

All I did was to post a credible link showing that two Thai banks, one of them government owned, are tits up. It also says there have been panicked customers causing runs on the bank.

Now, a broke Thai government (yes they are deficit spending and borrowing the money to pay the bills in Thailand) is being asked to cough up US$666 million dollars, or 2/3 of a billion dollars to bail them out. Of course the depositors are insured by the Thai government so no worries, right?

Now, this is just what we know so far. These things usually progressively get worse as folks really get to the bottom of it, but who knows?

So all I am is the messenger who you shouldn't shoot. I just posted a link and told the truth.

[bermondburi]

Because usery or interest on loans is haram, they found a loophole, religion is endlessly amusing.

you mean usury.

[Naam]

Because usery or interest on loans is haram, they found a loophole, religion is endlessly amusing.

you mean usury.

unfortunately not just usury as the Qr'an was initially pointing to. islamic clerics are nowadays translating "riba" as "interest" without differentiating between acceptable interest and usury.

[Supertuktuk]

By the way Fitch rates Islamic Bank of Thailand BBB- , the Bank has already received ongoing financial support from the Ministry of Finance (MoF), with capital in 2007 and 2010 but this is not the point....the question is " do you trust them" usually higher interest rate = high risk .....CIMB Thai offers 3,30 % 12 months and their rating is AA if i need to choose i know where I go

Edited April 28, 2013 by Supertuktuk

[Suradit69]

You don't have to read the fine print, it's a Thai government guarantee

The bank is also owned by the Thai government, so it's double safe. These are the same geniuses who brought Thailand the failed rice scheme, the new minimum wage, easy car loans and no-down home loans.

"...and no-down home loans."

That was the US who also created the wonderful mortgage-backed-securities surprise packages with AAA credit ratings that brought the world the recession we're still clawing our way out of and the Europeans who brought us the everything-is-free-we'll-pay-for-it-later scheme also known as socialized austerity.

Why do you think there have been new threads on an almost daily basis by farang whining about how long they can survive on their dwindling pensions & investments and their savings in their crappy home currencies? Rather than doing your financial planning based on emotional racist assumptions about the innate superiority of banks and investments back in Farang-Ville, why not think further ahead than your next visit to the ATM? The major Thai banks are well-capitalized, solvent and have no liquidity issues. With a little planning the money you spend here doesn't have to be purchased at the worst possible exchange rates.

Or you could plan on Mario Draghi & Co. managing your money for you:

Bank Of Cyprus Big Depositors To Lose Up To 60 Percent In Bailout

[NeverSure]

You don't have to read the fine print, it's a Thai government guarantee

The bank is also owned by the Thai government, so it's double safe. These are the same geniuses who brought Thailand the failed rice scheme, the new minimum wage, easy car loans and no-down home loans.

"...and no-down home loans."

That was the US who also created the wonderful mortgage-backed-securities surprise packages with AAA credit ratings that brought the world the recession we're still clawing our way out of and the Europeans who brought us the everything-is-free-we'll-pay-for-it-later scheme also known as socialized austerity.

Why do you think there have been new threads on an almost daily basis by farang whining about how long they can survive on their dwindling pensions & investments and their savings in their crappy home currencies? Rather than doing your financial planning based on emotional racist assumptions about the innate superiority of banks and investments back in Farang-Ville, why not think further ahead than your next visit to the ATM? The major Thai banks are well-capitalized, solvent and have no liquidity issues. With a little planning the money you spend here doesn't have to be purchased at the worst possible exchange rates.

Or you could plan on Mario Draghi & Co. managing your money for you:

> Bank Of Cyprus Big Depositors To Lose Up To 60 Percent In Bailout

Yes always, change the topic to the US. That makes you look really uninformed. We're talking about Thailand's no down home loans, and what damage they could do in Thailand.