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DOES IFSA 2013 MARGINALIZED MUDARABAH-BASED DEPOSIT? A
CASE STUDY OF AMBANK ISLAMIC BERHAD
Mohd Shaifuddin bin Mohd Noor
INTRODUCTION
The Islamic Financial Services Act 2013 (“IFSA”) differentiates investment account
from Islamic deposit. Investment account is demarcated by the usage of Shariah
contracts. It has non-principal guarantee feature for investment nature deposit.
Notwithstanding this, the IFSA offers adequate legal basis to upkeep the further
solidification of investment account process that provides proper protection to
investment account holders (IAH) whilst safeguarding financial stability of the Islamic
banking system. Under the IFSA, the urgency of payment for investment deposit
account upon insolvency of the Islamic financial institution (IFI) is treated separately
from Islamic deposit, in accordance with the rights and obligations accrued to the IAH.
Besides capital contribution, IFI source of financing are largely contributed by its
deposits. Would IFSA have negative impact on IFI’s deposit growth rate and deposit
mix motivates motivate the author to conduct this research. This paper shall use one of
the local IFI, AmBank Islamic Berhad (“AmBank Islamic”) as its reference to analyse
the impact of IFSA towards its deposits taking behaviour and its performance.
This paper shall analyse the behaviour of mudarabah deposit during post IFSA era.
Mudarabah contract is considered as a pure Shariah compliant contract whereby it was
practiced by Prophet Muhammad s.a.w. and Khadijah a.s. Hence, it could be
considered as the superior shariah investment contract. Nevertheless, IFIs encountered
great challenges in implementing it as we could see later in this paper. Shariah laws
manifested in mudarabah should demonstrate the superiority and “alamiyah” of Islamic
laws. Nevertheless, it encounters extreme challenges in implementing it demonstrates
by this study.
RESEARCH PROBLEM
Noor Saliza Zainal et al. (2009) in her empirical studies managed to establish the
relationship between mudarabah investment account and set of independent variables
comprised of gross domestic product (GDP), unemployment rate (UER), income per
capita (IPC) and consumer price index (CPI). Noor Saliza Zainal et al. (2009) found
out that UER, GDP, IPC and CPI have significant relationships with mudarabah
investment account. UER was found out as the most dominant factor that influenced
both investment and mudarabah accounts. The impact of IFSA towards total deposits
of investment and mudarabah accounts have yet to be established since IFSA was
recently enacted in 2013. This issue motivates the author to conduct this study. AmBank
Islamic’s financial data shall be the main reference point to fill up this gap.
Lack of transparency or disclosure guidelines related to the mudarabah or profit sharing
investment accounts (PSIAs) is amongst the problems in investment type deposit.
Information asymmetry and regulatory shortcomings in profit sharing investment
accounts are amongst the flaws in investment product. Rashid Ameer et al. (2012) found
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out that the IFIs were not transparent enough in policies, procedures, product design
and structure; profit allocation basis, methodology of calculating profit attributable to
investment account holders (IAHs). Nevertheless, information on Shari’ah compliance
was satisfactory. It is interesting that IFI do not provide full disclosure connected to
PSIAs because such revelation is not mandatory. Does IFSA overcome information
asymmetry effectively? This research therefore attempt to solve this issue by analysing
IFSA and Investment Account Guidelines (Bank Negara Malaysia 2014). This gap
inspires the author to conduct this research by using AmBank Islamic as the main
references. Does IFSA marginalized mudarabah deposit at AmBank Islamic through its
stringent guidelines and modus-operandi motivates the author to perform this research.
IFSA has redefined investment deposit (Bank Negara Malaysia 2014) from guaranteed
to non-principal guaranteed feature for investment nature deposit. This has led to
realignment of IFI deposit structure. Would such realignment affect IFI particularly
AmBank Islamic’s deposit taking behaviour, its funding structure and its performance?
These issues influences the author to perform this research.
Based on the above, the research problem could be summarized as follows:
i. Is IFSA have negative impact to AmBank Islamic mudarabah deposit?
ii. Does IFSA overcome information asymmetry effectively?
iii. How far AmBank Islamic’s funding structure and performance were
affected post IFSA.
PURPOSE OF STUDY
This study is designed to examine the impact of IFSA towards AmBank Islamic deposit
taking behaviour, its deposit product structure and its financial performance ultimately.
RESEARCH OBJECTIVES
i. To identify the impact of IFSA towards AmBank Islamic total mudarabah
or investment based deposits.
ii. To examine how IFSA could overcome information asymmetry effectively.
iii. To analyse AmBank Islamic liabilities and/or deposit structure and its
profitability post IFSA.
LITERATURE REVIEW
AmBank Islamic Berhad’s (“AmBank Islamic”) Background.
i. AmBank Group
Ammb Holdings Berhad (2015) declared that AmBank Group is one of Malaysia’s
premier banking groups with nearly 40 years of legacy in understanding Malaysians
and provides a wide range of both conventional and Islamic financial solutions and
services, including retail banking, wholesale banking, as well as the underwriting of
general insurance, life assurance and family takaful.
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The Group receives strong support from the Australia and New Zealand Banking Group
(“ANZ”) (one of Australia’s leading banks) particularly in Board and senior
management representations, risk and financial governance, products offering and new
business developments. In the general insurance business, the Group has partnered with
Insurance Australia Group Ltd (“IAG”). Whilst in the life assurance and family takaful
businesses, the Group has a partnership with MetLife International Holdings Inc.
(“MetLife”). The Group continues to benefit in terms of expertise transfer from IAG
and MetLife. AMMB Holdings Berhad is the holding company of AmBank Islamic
Berhad and is a public listed company on the Main Market of Bursa Malaysia.
ii. AmBank Islamic Berhad (“AmBank Islamic”)
AmBank Islamic Berhad (formerly known as AmIslamic Bank Berhad) is the full-
fledged Islamic banking subsidiary of AmBank Group. Established in May 2006, as a
wholly owned subsidiary of AMMB Holdings Berhad, AmBank Islamic has built a
solid reputation in serving the banking needs of corporates and individuals since its
beginnings as AmBank Group’s Islamic Banking Division in 1993.
Being the first-to-market in the region through numerous product innovations, AmBank
Islamic provides a wide range of Shariah-compliant retail banking, business banking
and related financial services, which also include investment advisory as well as
treasury products. Striving to be the premier Islamic bank of choice, AmBank Islamic
continues to grow while providing their customers a complete range of innovative
Shariah-compliant financial solutions.
AmBank Islamic’s shariah advisor comprises of competent scholars currently attach to
local universities. Refer to Annexure A for details.
Islamic banking business:
Source: AMMB Holdings Berhad (2015)
IFSA (Ifsa 2013)
IFSA was mooted from recommendation number 4.1.1 of Bank Negara Malaysia
(2011), the Financial Sector Blueprint 2011-2020. The recommendation is to enact a
comprehensive legislative framework for the conventional and Islamic financial
systems respectively. The proposed legislation will reinforce a sound, transparent, and
accountable system for effective regulation and supervision that is consolidated across
the banking, insurance, takaful, financial intermediary and payment system services
sectors.
Gopal Sundaram (2013) (Who is the leading legal advisor of IFSA and former BNM
Assistant Governor, BNM) have inscribed splendidly the history of IFSA. Islamic
Banking was formally introduced in Malaysia with the enactment of the Islamic
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Banking Act 1983, the Government Investment Act 1983 and the Takaful Act 1984 by
the Malaysian Parliament.
Islamic finance in Malaysia has enjoyed continuous and stable growth and now
constitutes more than 20% of the banking assets of the banking system. After some
thirty years of resilient and undisrupted growth of Islamic finance in this country, it has
become imperative to review and assess the suitability and appropriateness of the
legislative and regulatory framework in which Islamic banking and takaful operates.
Following extensive policy research, discussions and consultations, Bank Negara
Malaysia issued the Financial Sector Blueprint 2011 -2020 in December 2011. As noted
in the Blueprint itself, “the 10-year Blueprint is a strategic plan that charts the future
direction of the financial system as Malaysia transitions towards becoming a high
value-added, high-income economy”. The Blueprint notes that “A key pillar of financial
sector development for this decade is the strengthening of Malaysia’s position as an
international Islamic financial centre. Given the more challenging international
environment, emphasis will increasingly be placed on enhancing the resilience of
Islamic finance, including in liquidity and crisis management, to complement the
ongoing efforts in strengthening the relevant regulatory and legal framework for Islamic
finance and in promoting greater harmonisation in interpretations.”
IFSA therefore was intended to provide the strengthened regulatory and legal regime
to meet the challenges and developments of an increasingly sophisticated and
internationalised Islamic finance industry. Surianom MiskamandMuhammad
Amrullah Nasrul (2013) and Gopal Sundaram (2013) both recognized that IFSA was
intended to pave way for the development of an end-to-end Shariah compliant
regulatory framework for the conduct of Islamic financial operation in Malaysia. The
new Act provides a comprehensive legal framework that is in full compliance with
Shariah in all aspects of regulation and supervision, from licensing to the winding up
of the Islamic financial institutions. The legislation specifically provides for the
enforcement of Shariah non-compliance risk and imposes statutory duty upon the
Islamic financial institutions to ensure that their aims, operations, affairs, businesses
and activities are in compliance with Shariah rules. IFSA has the effect of repealing the
Islamic Banking Act 1983, the Takaful Act 1984, the Payment System Act 2003 and
the Exchange Control Act 1953.
IFSA is an omnibus legislation for the regulation and supervision of key Islamic
financial institutions such as Islamic banks, takaful operators, international Islamic
banks, international takaful operators as well as operators of payment systems which
the transfer of funds between Islamic bank accounts or which enables payments to be
made by means of Islamic payment instruments, issuers of Islamic payment
instruments, takaful brokers and Islamic financial advisor. As an omnibus legislation,
it also provides for regulation and supervision of payment systems and the oversight of
the Islamic money market and Islamic foreign exchange market.
The principal regulatory objectives of IFSA is to promote financial stability and
compliance with Shariah. The new law commands Bank Negara Malaysia to foster the
safety and soundness of Islamic financial institutions, the integrity and orderly
functioning of the Islamic money market and the Islamic foreign exchange market as
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well as safe, efficient and reliable payment systems and Islamic payment instruments
and fair, responsible and professional business conduct of Islamic financial institutions.
The Bank is also required to strive to protect the rights and interests of consumers of
Islamic financial services and products.
Definition of Investment Account & Islamic Deposit {Sect. 2 (1) of (Ifsa 2013)}
Ifsa (2013) Section 2(1) defined “investment account” as an account under which
money is paid and accepted for the purposes of investment, including for the provision
of finance, in accordance with shariah on terms that there is no express or implied
obligation to repay the money in full and (a) either only the profits, or both the profits
or losses, thereon shall be shared between the person paying the money and the person
accepting the money; or (b) with or without any return.
“Islamic deposit” under Ifsa (2013) Section 2(1) means a sum of money accepted or
paid in accordance with Shariah (a) on terms under which it will be repaid in full, with
or without any gains, return or any other consideration in money or money’s worth,
either on demand or at a time or in circumstances agreed by or on behalf of the person
making the payment and person accepting it; or (b) under an arrangement, on terms
whereby the proceeds under the arrangement to be paid to the person paying the sum
of money shall not be less than such sum of money,
Based on the above definition, Islamic deposits will now confined to principal
guaranteed shariah contract i.e. qard, Murabahah and wadiah whilst funds placed for
investment purpose under principal non-guaranteed shariah contracts such as
mudarabah and wakalah shall fall within Investment Account. As a result, IFI product
offerings had to be re-aligned to meet definition of Islamic deposit and investment
account.
iii. Mudarabah
Investment Account guidelines, Bank Negara Malaysia (2014) defined various
investment related terminologies / principals as follows:
“Investment account holder”, refers to a customer with an investment account
maintained at an IFI.
“Mudarabah”, means a contract between capital provider (rabbul mal) and an
entrepreneur (mudarib) under which the rabbul mal provides capital to be managed by
the mudarib based on any profit generated from the capital is shared between the rabbul
mal and the mudarib according to mutually agreed profit sharing ratio (PSR) whilst
financial losses are borne by the rabbul mal provided that such losses are not due to the
mudarib’s misconduct (ta’adi), negligence (taqsir) or breach of specified terms
(mukhafalah al-shurut).
“Musharakah”, means a partnership between two or more parties which
may take effect through contractual relationship (‘aqd) or by operation of Islamic law,
whereby all contracting parties will share the profit and bear loss from partnership.
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“Restricted investment account or RIA”, refers to a type of investment account where
the customers provides a specific investment mandate to the IFI such as purpose, asset
class, economic sector and period for investment.
“Unrestricted investment account or URIA", refers to a type of investment account
where the customers provides the IFI with the mandate to make the ultimate investment
decision without specifying any particular restrictions or conditions.
“Wakalah”, means a contract in which a party (muwakkil) authorises another party as
his agent (wakil) to perform a particular task, in matters that may be delegated, either
voluntarily or with imposition of fee.
“Wakalah bi al-istithmar”, means a wakalah contract entered for the purpose of
investment.
Mudarabah could be used to finance short-and medium-term investment projects too.
Nevertheless, it had limited exposure in Malaysia’s Islamic banking industry due to
high risk and high capital charges or risk weightage as required by the regulator.
Mudarabah financing based contract contributed less than 0.02% of total IFI financing
for the past 12 months ended April 2016. See Annexure B for details Malaysia’s
mudarabah financing exposure. Bank Negara Malaysia (2012) on Capital adequacy
framework for Islamic banks (Risk-weighted assets) has imposed 150% risk weight to
mudarabah project financing. In other words, for each RM1.00 million additional
mudarabah financing would requires IFI to increase its capital due to higher Risk
Weighted Assets by 150% to RM1.5 million and also for IFI to maintain at least 8%
Capital Adequacy Ratio (CAR). This CAR was sanctioned by (Bank Negara Malaysia
2012) under the Implementation of Basel III guideline. Refer to Annexure C and
Annexure D for Risk Weight and computation of Risk Weighted Assets & CAR
respectively.
Tatiana et al. (2015) described mudarabah contracts are analogous to trust-based
financing in the traditional financial system. The income generated from the invested
money is distributed between the financial institution and the entrepreneur in
accordance with the agreement, concluded at the moment of signing the contract.
Simon ArcherandRifaat Abdel Karim (2009) have identified several regulatory
delinquent arising from the use of profit sharing investment accounts (PSIAs). It does
not meet the legal definition of deposits. Neither the customers’ capital nor any return
on it is guaranteed by the bank. Hence, PSIAs are not ‘capital certain’ and are,
essentially, investment products. IFIs therefore, do not meet the criteria to be classified
as depositary institutions as required by banking regulations in the majority of
countries. Nevertheless, in Malaysia this problem has been addressed by IFSA 2013. In Jordan, Malaysia and Qatar, the regulators requires IFI not to pass losses to
unrestricted PSIAs via ‘smoothing’ the periodic returns paid to them. These tactic is
achieved by a combination of low risks investment strategies and establishment of
reserve accounts made out of profits payable to PSIA holders. Reserves in this account
would be used to smooth profit payment (known as profit equalisation reserve (PER))
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and to shelter periodic losses (known as investment risk reserve (IRR)). In Malaysia
PER is no longer being practice by IFI since the introduction of IFSA.
Low return attributable to profit smoothing is common in PSIA. V Sundararajan (2007)
deliberated key subjects in the measurement and mechanism of risks in IFI, particularly
the effects of profit sharing investment accounts (PSIA) for risk measurement, risk
management, capital adequacy and supervision. Cross country data on a sample of
banks reveal a considerable smoothing of returns paid to PSIA, despite wide
divergences in risk. This suggests that the sharing of risks with PSIA is fairly imperfect
in practice, although, in principle, well-designed risk (and return) sharing arrangements
with PSIA can serve as a powerful risk mitigant in Islamic finance. Supervisory
authorities can provide strong incentives for effective and transparent risk sharing and
the associated product innovations, by inking the extent of capital relief on account of
PSIA with appropriate supervisory review of the risks borne by the PSIA (equivalently
the extent of displaced commercial risk assumed by the shareholders), and by requiring
adequate disclosure of these risks.
Given the overwhelming use of non-PLS financing modes, IFI cannot be said to be risk-
sharing in any meaningful sense. Feisal Khan (2010) declared that IFI transactions
mimic conventional, collateralized debt contracts very closely, often right down to
actually using current market interest rates as pricing benchmarks. IFSA which has
defined Investment account which is PLS in nature as non-guaranteed principal
An empirical studies conducted by Saiful Anwar Dadang Romansyah et al. (2010) has
successfully managed to predict the mudarabah time deposit return. The research model
was capable to predict with 95.22% accuracy for Bank Shariah Mandiri 12 months
mudarabah Time Deposit. This model could be used as an adequate tool to help
depositors in predicting future return of mudarabah Time Deposit product at Bank
Shariah Mandiri. This prediction capability will provide depositors tools to determine
the probably highest return investment in the market. This tool may also keep depositor
to stay longer in the IFI before flowing the surplus fund to conventional bank. This is
an important findings particularly for the customers who love certain and fixed
investment return.
Based on the above, PSIA which is largely based on mudarabah concept have various
inherent issues which restrict its growth rate. The introduction of IFSA which clearly
defined it as non-guaranteed principal is expected to further deteriorate its performance.
Mudarabah is deemed as the pure Islamic model compared to debt based mode.
However, it is not a favourite model amongst the industry players. Mudarabah is less
preferable compared to Islamic debt financing instruments such as murabahah and bai’
bithaman ajil. This is caused by the existence of asymmetric information that
continuously presents in mudarabah (profit sharing) contracts and creates problems of
adverse selection and moral hazard. Due to this, mudarabah (profit sharing) has
declined it importance as a financing or deposits vehicle.
RESEARCH METHODOLOGY
The present research is based on a deductive approach - strictly qualitative. For
analysing all the data the author used the following research methods: comparative
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method, document analysis, external observation. Qualitative method of research and
descriptive approach to research were applied in this study as they were appropriate in
looking into the research issue understudied.
Library research was adopted because IFSA was recently launched in June 2013. Data
post IFSA therefore is limited. As this is a case study over AmBank Islamic Berhad,
hence AmBank Islamic’s audited accounts for 9 financial years ended March 2007 to
2015, 3rd quarter interim financial statement as at 31.12.15 and Bank Negara Malaysia
data would be the main source of information for this research. These information are
derived from the public domain and hence confidentiality issue does not arise at all.
RESEARCH FINDINGS
i. IFSA’s impact to Islamic Banking’s deposit
Figure 1 revealed that contribution of Investment deposit (mudarabah) against total
deposit declined significantly from 37.5% in Dec. 2013 to 0.4% in March 2016. In
March 2007, it contributed 58.1% of total deposit. However, it has registered a
declining trend since then. Sharp declined was registered since Dec. 2013, immediately
after the introduction of IFSA.
Source: Bank Negara Malaysia
Under IFSA all Investment deposit which is pre-dominantly governed under
Mudarabah contract the principal and profit are not guaranteed. Principal and profit
payments are purely subject to the performance of the investment. Investment deposit
is therefore subject to capital reduction. Fears of depositors losing its investment which
may led to market instability and a “run” over the bank are the major contributory
factors for IFI to near total shut down of its mudarabah based deposit to other type of
deposits.
Figure 1 above exhibited that total deposit continued to grow for the past 37 quarters
ended March 2016. However, Investment deposit has depleted to 0.4% of total deposit
in March 2016. IFSA does not affect deposit growth rate. However deposit mixed are
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Q1
Q2
Q3
Q4
Q5
Q6
Q7
Q8
Q9
Q10
Q11
Q12
Q13
Q14
Q15
Q16
Q17
Q18
Q19
Q20
Q21
Q22
Q23
Q24
Q25
Q26
Q27
Q28
Q29
Q30
Q31
Q32
Q33
Q34
Q35
Q36
Q37
Figure 1: Industry Investment Deposit Contribution for the
past 37 Quarters ended March 2016.
19.6% in Dec. 2014
37.5% in Dec. 2013
0.5% & 0.4% in Dec. 2015 &March. 2016 respectively
58.1% in March 2007
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moving away from Investment deposit which are pre-dominantly under mudarabah
contract.
Source: Bank Negara Malaysia
Figures 1 & 2 portrayed that Investment Deposit based on mudarabah is less preferable
by the industry players beginning Dec 2013 or at Quarter 28, 6 months after IFSA
effective date, 30 June 2016. As at March 2016, mudarabah based deposit or Investment
deposit has depleted to 0.4% of total IFI deposits. These data showed that IFSA has
indirectly marginalised mudarabah deposit in the Islamic banking industry. The
industry has adopted Murabahah Tawarruq (“MTQ”) as the principal contract for its
deposits products. MTQ contract currently dominating IFIs deposits marginalising
mudarabah based deposit to the wall. Declining trend on Investment deposit is very
obvious at industry level as portrayed out in Annexure E.
i. IFSA impact to AmBank Islamic.
Mudarabah deposit.
On 14 March 2014, Bank Negara Malaysia (“BNM”) had issued a policy document on
Investment Account ("IA") aimed at outlining the regulatory requirements on the
conduct of investment accounts that are consistent with the IFSA and that comply with
standards on Shariah issued by BNM. This policy document comes into effect on 14
March 2014 (Bank Negara Malaysia 2014).
On 14 February 2014, BNM had issued the Transition Policy under IFSA (“transition
policy"), allowing Islamic financial institutions a transition period until 30 June 2015
to comply with IFSA and BNM standards on Shariah and policy document on
Investment Account. Pursuant to the application of the policy document on Investment
Account and the transition policy, as reported in Ambank Islamic Berhad (2015), the
Bank has adopted the followings:
0.0
50,000.0
100,000.0
150,000.0
200,000.0
250,000.0
300,000.0
350,000.0
400,000.0
450,000.0
Q1 Q3 Q5 Q7 Q9 Q11 Q13 Q15 Q17 Q19 Q21 Q23 Q25 Q27 Q29 Q31 Q33 Q35 Q37
Figure 2: Total Deposit vs Investment Deposit
for the past 37 Quarters ended March 2016
(In RM Million)
Total Deposit Total Investment Deposit
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(i) Segregated investment deposit products from deposit accounts and presented
these separately as investment accounts in the financial statements;
(ii) Discontinued with the application of profit equalisation reserve ("PER"). The available amounts in PER had been distributed to the remaining account
holders in the form of hibah.
As a result, Investment Account was introduced by AmBank Islamic as a new product
offering. The accounting policy adopted for Investment account pursuant to IFSA
and Bank Negara Malaysia (2014) are as follows:
Unrestricted Investment Account
AmBank Islamic Unrestricted Investment Account is based on the Shariah concept of
Wakalah bil Istithmar. It refers to an arrangement whereby the Investment Account
Holder ("IAH") (as the principal or muwakkil) appoints AmBank Islamic as an agent
(the "wakil") for the purpose of investment. AmBank Islamic as wakil shall not be liable
to compensate losses except losses due to its own misconduct, negligence or breach of
specified terms. The amount invested by the IAH aims to provide the IAH with steady
flow of income by investing in low risk investments which AmBank Islamic deems
appropriate. For current financial period, AmBank Islamic did not impose Wakalah fees
to the IAH.
Restricted Investment Account (“RIA”)
AmBank Islamic’s RIA is based on mudarabah concept where IAH agree to participate
in the specific financial/investment activities undertaken by AmBank Islamic and share
the profit generated from financing and/or investment activities based on an agreed
profit-sharing ratio. The IAH shall bear the losses arising from the assets funded under
the mudarabah concept except in cases of misconduct, negligence or breach of
contracted terms by AmBank Islamic. Therefore, any allowances for impairment and
capital charge will be transferred to the IAH to reflect the potential losses to the IAH.
Currently, the existing RIA arrangement is between the AmBank Islamic and
AmBank Berhad only. RIA is not offered to the public yet.
Distribution of profit between the unrestricted IAH and AmBank Islamic.
The unrestricted IAH place funds with AmBank Islamic in exchange for an expected
rate of return (“ERR”) for the agreed period of the investment. AmBank Islamic
mobilises the investment account funds in accordance with its investment strategy to
generate returns. In the event that the actual rate of return (“ARR”) is higher than the
ERR, the IAH agree that this difference shall be retained by AmBank Islamic as a
performance incentive. On the contrary, if the ARR is lower than the ERR, AmBank
Islamic is obliged to distribute the ARR to the IAH.
AmBank Islamic adopts the standard methodology in calculating the rate of return and
profit distribution to the IAH consistent with Rate of Return framework issued by
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BNM. AmBank Islamic neither adopt profit smoothing practices nor employ
displaced commercial risk technique in the calculation of the ARR to the IAH.
As a result, AmBank Islamic’s deposit composition has changed drastically as shown
in Figure 3 herein. Total deposit continue to grow and was not affected by IFSA.
However, mudarabah based deposit has extinct from the bank’s book.
Source: AmBank Islamic audited accounts.
AmBank Islamic depositors are divided into two i.e. Non-Financial Institution and
Financial Institution customer. Deposits are divided into two models i.e. mudarabah
and non-mudarabah models. AmBank Islamic’s deposit continued to grow steadily for
the past 10 years’ ended 3rd quarter of FYE 3/2016. Nevertheless, the outstanding
mudarabah based deposit was ground zero as at December 2015 (or 3rd quarter of
FYE 3/2016) since all have been transferred to other type of deposit, particularly
Murabahah Tawarruq (See Annexure F for details). IFSA therefore has marginalized
mudarabah deposit at AmBank Islamic and the industry too.
Deposit mix, profitability & financing deposit ratio.
AmBank Islamic has developed Commodity Murabahah Term Deposit to replace the
mudarabah investment deposit. Commodity Murabahah is a Shariah principle based on
Tawarruq and Murabahah concept (See Annexure G for details of Murabahah Tawarruq
model).
In July 2014, AmBank Islamic had officially communicated to all mudarabah
Depositors that all existing investment deposits shall be converted into Commodity
Murabahah deposit. AmBank Islamic claimed in their communication that this exercise
is to comply with IFSA, It is also to allow customer to enjoy principal guaranteed
deposit and fixed profit rate. The conversion was scheduled to commence in August
2014. The communication to the customers were also serves as a tool to obtain
customers’ consent for the conversion of the existing mudarabah deposit. Customers’
mudarabah existing deposit will be automatically converted into Commodity
Murabahah deposit upon its renewal if AmBank Islamic do not hear anything from the
customers by 15 August 2014. Auto conversion shall take place upon maturity of each
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 3Q
2016
Figure 3: AmBank Islamic deposit for the past 10 years
ended 3rd Quarter FYE 3/2016 (In RM'000)
Non-Mudharabah Mudharabah Total Deposits
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mudarabah deposit commenced on 15 August 2014. Details of the conversion exercise
is summarized at Annexure H.
Appointment of AmBank Islamic as the customers’ agent to sale & purchase the
commodity on behalf of the customers are secured simply by customers’ decision to
continue maintaining their deposit with AmBank Islamic after the conversion. Such
continuation shall also constitute customers’ consent and agreeable to the Specific
Terms and Conditions for Commodity Murabahah-based Term Deposit and it shall
automatically be binding on the customers. These auto conversion and appointment as
customers’ agent are shariah compliant.
IFSA has led to change in AmBank’s funding structure via the creation of Investment
Account in its balance sheet. Ambank Islamic Berhad (2015), declared RM1.3 Billion
outstanding RIA. This RIA is a contract between AmBank Islamic as mudarib and
AmBank Berhad as the rabbul mal. It is used for certain financing activities conducted
by AmBank Islamic. Profit to be distributed to AmBank Berhad’s investment therefore
now will subject to the profit generated from financing and/or investment activities
based on an agreed profit-sharing ratio. AmBank Islamic prepared to accept such
investment by AmBank Berhad since both are having common shareholder /
management team and common investment / credit risk policies. RIA as of today is not
offered by AmIslamic Bank to external customers.
Ambank Islamic Berhad (2015)Deposit mix however remained unchanged whereby
low cost deposit CASA (Curent & Saving Accounts) continued to contribute less than
20% of AmBank Islamic total deposit during pre & post IFSA (See Annexure I). As a
result of high cost of fund due to low contribution of CASA, AmBank Islamic
profitability continue to decline during pre and post IFSA. AmBank Islamic pre-tax
profit, net margin, ROA and ROE were all on declining trend prior to IFSA as depicted
at Annexure J and Annexure K. We therefore may conclude that IFSA has no significant
impact towards AmBank Islamic’s profitability. Both IFSA and AmBank Islamic’s
profitability has no direct relationship at all.
AmBank Islamic’ financing ratios remain stable. Deposit to Asset, Financing Deposit
and Financing to Total Funding ratios during pre & post IFSA remain unchanged at an
average of 81%, 84% and 78% respectively. See Annexure L for details. Hence, we
may conclude that IFSA has no impact on AmBank Islamic funding structure.
Information asymmetry.
Bank Negara Malaysia (2014) has effectively and successfully managed information
asymmetry. Non-transparency inherent to mudarabah based product is now become
history with the introduction of IFSA. Bank Negara Malaysia (2014) is an Investment
Deposit policy. This policy document sets out: (a) specific requirements on the
structuring, risk management and market conduct of investment accounts; (b) oversight
requirement over the management of investment account funds and investment assets;
and (c) transparency and disclosure requirements including minimum information to be
disclosed in product disclosure sheet, key terms and conditions to be included in
primary documents, investment account performance report to the investors and
additional disclosures in the IFI’s financial statements; and (d) prudential requirements
relating to investment accounts.
334
334
Information asymmetry where no comprehensive disclosure inherent to mudarabah
based investment account as identified by Rashid Ameer et al. (2012) has now been
resolved via Investment Account policy declared by Bank Negara Malaysia (2014).
This policy document covers wide area of transparency and disclosure covering various
subjects such as product structuring, management of investment account, oversight
arrangement, risk & management control, business & market conditions, transparency
& disclosure and prudential requirement.
Stringent information regularity requires costly infrastructure to be in place. Yet it
continue to pose high risk to AmBank Islamic and the industry players as a whole as in
the event of capital loss may lead to a ‘run’ over the Bank. This is due to the
misconception and/or lack of product knowledge by the the public on each and every
banking products, particularly the investment account. IFSA therefore has led to
marginalizing of mudarabah products largely due to non-guarantee principal, high set-
up cost and continue to pose high risk to the AmBank Islamic despite availability of
transparency and disclosure elements.
Based on the findings we therefore can accept on the hypothesis that IFSA has severely
affected AmBank Islamic deposit taking behaviour. Mudarabah based deposit has
depleted to ground zero and now being replaced with Murabahah Tawarruq Deposit.
AmBank Islamic no longer offer mudarabah deposit to the public. It is only restricted
to sister company, AmBank Berhad. It was offered as a tool to raise additional funding
from related or friendly party.
CONCLUSION
i. Implication to policy.
Strict definition of mudarabah by IFSA and paved further by Bank Negara Malaysia
(2014) has made the industry jittery on Islamic banking. The industry reacted negatively
by switching all investment account into debt based product. It shown that the Islamic
banking industry is not ready to embrace with pure Islamic concepts. The industry
continued to be dominated by interest based concept which is prohibited by Islam. As
we are aware that debt based financing is a contentious concept because it is deemed as
a back door to interest bearing instrument.
Mudarabah is a Sunnah of Prophet Muhammad s.a.w. when He conducted the trade on
behalf of Khadijah a.s. It appears that this Sunnah has various inherent weaknesses
leading to dry respond from the industry players. As a Muslim scholars, industry
experts, academicians and muamalat graduates must play a major role in promoting and
uphold this Sunnah. Information symmetry is a symbol of honesty and trustworthy.
These element therefore must be indoctrinated in each and every players involve in
mudarabah in order to avoid misconception of this concept.
ii. Proposal
The author recommends further investigation on the subject why there is strong
rejection on mudarabah still exist despite information symmetry. Does risk and return
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335
elements are the stumbling block for the success implementation of mudarabah based
model? This is the gap to be covered by future research.
iii. Summary
This paper has managed to resolve the research problem statement. IFSA have negative
impact on investment account which are based on mudarabah model. Policy on
investment account issued by Bank Negara Malaysia have managed to mitigate
information asymmetry effectively. Earlier findings on lack of disclosure guidelines
related to profit sharing investment account has been addressed herein via introduction
Investment Account policy by Bank Negara Malaysia. This policy is very
comprehensive to protect the investors particularly. However, the author believed that
the high infrastructure set-up cost become major constraint for IFI and AmBank Islamic
in particular to implement it. IFSA has no effect at all on IFI’s performance and
profitability. Over dependence on high costs funding instrument has affected AmBank
Islamic earnings. Overall, well integrated and strategized plan need to be established in
order to educate, promote and convinced the industry players to subscribe for
mudarabah based investment account.
BIBLIOGRAPHY
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Ended March 2007 - 2015
Ambank Islamic Berhad. 2015. Interim Financial Statements for the Period 1
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Ammb Holdings Berhad. 2015. Audited Annual Report. Kuala Lumpur AmBank
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Bank Negara Malaysia 2011. Financial Sector Blueprint 2011-2020. Kuala Lumpur,
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Bank Negara Malaysia 2012. Implementation of Basel Iii. Prudential Financial Policy
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Feisal Khan. 2010. How ‘Islamic’ Is Islamic Banking? Journal of Economic
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Gopal Sundaram. 2013. The Islamic Financial Services Bill 2012. Kuala Lumpur:
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Ifsa 2013. Islamic Financial Services Act 2013. Kuala Lumpur: Malaysia.
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Rashid Ameer, Radiah Abdul Kader & Nurmazilah Mahzan. 2012. Information
Asymmetry and Regulatory Shortcomings in Profit Sharing Investment
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Saiful Anwar Dadang Romansyah, Sigit Pramono & Kenji Watanabe. 2010.
Treating Return of Mudharabah Time Deposit as Investment Instrument: A
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ECONOMICS AND FINANCE 121.
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337
Annexure A
AmBank Islamic Berhad : Shariah Advisors’ Profile
Professor Dr. Amir Husin Mohd Nor
Prof. Dr. Amir Husin is currently a Professor at the Faculty of Syariah & Law,
University Sains Islam Malaysia (USIM). He obtained his first degree (Hons) in Shariah
from Academy of Islamic Studies, University of Malaya. He then successfully
completed his Master in Law (LL.M) from University of
London and subsequently achieved his Ph.D in Islamic Studies from University of
Edinburgh. His areas of specialisation are Islamic Jurisprudence (usul fiqh) and Law.
Associate Professor Datin Dr. Noor Naemah Abd. Rahman Dr. Noor Naemah Abd. Rahman is currently a lecturer and Associate Professor at the
Fiqh and Usul Department for Academy of Islamic Studies, University of Malaya. She
obtained her first degree in Shariah from University of Malaya, a Master degree in
Shariah from University of Jordan and a Ph.D from University of Malaya. Her areas of
specialisation are Islamic Jurisprudence (usul fiqh) and fatwa.
Assistant Professor Dr. Tajul Aris Ahmad Bustami Assistant Prof. Dr. Tajul Aris Ahmad Bustami is currently a lecturer and Assistant
Professor at Department of Islamic Law, Ahmad Ibrahim Kulliyyah of Laws,
International Islamic University Malaysia (IIUM). He received his first Degree in Law
(LL.B (Hons) & LL.B (Shariah)(Hons)) from IIUM and a Master degree in Law (LL.M)
from University of London. He then successfully obtained a Diploma in Shariah Law
and Practice (DSLP) a professional post-graduate programme from IIUM. Later, he
received his Ph.D in Law from IIUM. His areas of specialisation are Islamic Banking
Law and Takaful, Muslim Law of Succession & Waqf and Administration of Estates.
Dr. Asmak Ab Rahman
Dr. Asmak Ab Rahman is currently a senior lecturer at Department of Syariah and
Economics, Academy of Islamic Studies, University of Malaya where she received her
first Degree and Master in Shariah followed by Ph.D in Islamic Economics. Her areas
of specialisation are Comparative Economic Development, Takaful, Islamic Banking,
Islamic Economics and Economics of Waqf.
Associate Professor Dr. Adnan Yusoff
Dr. Adnan Yusoff is currently a senior lecturer at Institute of Liberal Studies, Universiti
Tenaga Nasional (UNITEN), Kajang, Selangor. He received his first degree in Shariah
(Hons) from University Al-Azhar, Cairo, Egypt. He then obtained a Master of
Comparative Law (MCL) from International Islamic University Malaysia, Kuala
Lumpur and received his Ph.D in Islamic Muamalat at University of Malaya. His areas
of specialisation are Islamic Commercial Law, Islamic Law of Transactions, Islamic
Jurisprudence (usul fiqh), Islamic Family Law and Islamic Criminal Law.
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338
Annexure B
Mudarabah Financing Contribution in the Islamic Banking industry.
Source: Bank Negara Malaysia
Mudarabah financing contributed less than 0.02% of total Islamic Banking industry
financing.
0.0160%
0.0170%
0.0180%
0.0190%
0.0200%
0.0210%
0.0220%
0.0
50,000.0
100,000.0
150,000.0
200,000.0
250,000.0
300,000.0
350,000.0
400,000.0
450,000.0
Mudarabah Financing Contribution for the past 12 months ended
April 2016 (In RM'000)
Mudarabah Total Financing Mudarabah Contribution
339
339
Annexure C
Risk Weight
No Exposure / financing to various type of customer &
types of Islamic contracts.
Risk Weight
1 Malaysia- Federal government and Bank Negara Sukuk in
ringgit.
0%
2 Guaranteed by federal government. 0%
3 Another sovereign of central bank in ringgit. 0% - 20%
4 Guaranteed by sovereign or central bank 0% - 20%
5 Rating of sovereign
5.1 AAA to AA 0%
5.2 A+ to A- 20%
5.3 BBB+ to BBB- 50%
5.4 BB+ to B- 100%
5.5 CCC+ to D 150%
5.6 Unrated 100%
6 Non-federal government public sector. 20%
7 Multilateral development banking (e.g. Asia
Development Bank / Islamic Development Bank)
0%
8 Banking institutions & Corporations
Rating on short term exposures (commercial paper)
8.1 A-1 20%
8.2 A-2 50%
8.3 A-3 100%
8.4 Others 150%
9 Rating on long term exposures to banking institutions.
9.1 AAA to AA 20%
9.2 A+ to A- 50%
9.3 BBB+ to BBB- 50%
9.4 BB+ to B- 100%
No Exposure / financing to various type of customer &
types of Islamic contracts.
Risk Weight
9.5 CCC to D 150%
9.6 Unrated 50%
10 Rating of corporates, takaful companies, securities firms
and fund manager.
10.1 AAA to AA 20%
10.2 A+ to A- 50%
10.3 BBB+ to BB 100%
10.4 B+ to D 150%
10.5 Unrated 100%
11 Exposure to Retail Portfolio (individual or SME) via
credit cards, cashline, personal financing, hire purchase
and term financing based on murabahah / inah / BBA /
ijarah contracts.
75%
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340
11.1 Term financing to retail portfolio over 5 years
tenor.
100%
12 Financing secured by Residential Real Estates (RRE)
Property based on murabahah / ijarah / BBA / Inah
contracts.
12.1 Financing to value ratio (FTV) less 80% 35%
12.2 FTV over 80% to 90% 50%
12.3 FTV more than 90% 100%
12.4 RRE to priority sector – FTV less than 80% 35%
12.5 RRE to priority sector – FTV 80% to 90% 50%
12.6 RRE to priority sector – FTV over 90% 75%
13 Exposures secured by Commercial Real Estate (CRE)
The risk weight is based on No. 1 to 11 above (refer no. 1 to
11)
No Exposure / financing to various type of customer &
types of Islamic contracts.
Risk Weight
14 Higher risk assets :
musharakah / mudarabah contracts, financing abandoned
projects and venture capital.
150%
15 Cash / gold 0%
16 Guaranteed by CGC and financing to local stock
exchange
0%
17 Clearing house 20%
18 Unit trust / property trust / publicly traded equity
investment.
100%
19 Equity investment by federal government / BNM 100%
20 Others not specified in 1 to 19 above. 100%
21 Islamic Contracts – Murabahah / BBA / Ijarah / inah /
Salam
(refer to 1 to 20
above)
22 Musharakah – publicly traded equity 100%
23 Musharakah – non-publicly traded equity 150%
24 Musharakah – project financing 150%
25 Mudarabah – project financing – based on rating (refer to 5 to 10
above)
26 Mudarabah – project financing. 150%
27 Sukuk – rated - based on rating (refer to 5 to 10
above)
28 Sukuk – unrated - based on underlying contracts (refer to 21 to 26
above)
Source: Bank Negara Malaysia (2012)
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341
Annexure D
Computation of Risk Weight Assets and CAR
Additional capital required due to high Risk Weight of 150% on
Mudarabah Financing
RM '000
Capital Adequacy Ratio (CAR)
Assumptions:
Total Capital (TC) 3,909,099.48 TC0
Risk Weighted Assets (RWA) 48,863,743.56 RWA0
CAR = (TC / RWA) 8.00% CAR0
Projected additional Mudarabah financing
(AF) 100,000.00
Risk Weight 150%
New Capital required to maintain 8% CAR0
Additional RWA = 150% x AF 150,000.00 RWA1
TC1 to maintain 8% CAR : TC1 / (RWA0 + RWA1)
8%= TC1 / RWA2
8%= TC1 / 49,013,743.56
TC1 = 8% (49,013,743.56)
TC1 = 3,921,099.48
Additional Capital to finance
additional RWA1 : TC1 - TC0
12,000.00 #
New CAR1=
(TC1 /
RWA2)
3,921,099.48 8.00%
49,013,743.56
Source: Author’s illustration
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342
Annexure E
Source: Bank Negara Malaysia.
0.0
50,000.0
100,000.0
150,000.0
200,000.0
250,000.0
300,000.0
Q1 Q3 Q5 Q7 Q9 Q11 Q13 Q15 Q17 Q19 Q21 Q23 Q25 Q27 Q29 Q31 Q33 Q35 Q37
Islamic Banking industry deposit growth by type for the
past 37 quarters ended March 2016 (In RM '000)
Total Investment Deposit Demand Deposit Saving Deposit
NID Others Deposit
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343
Annexure F
AmBank Islamic Deposit growth & composition for the past 10 years ended 3rd
Quarter of FYE March 20161
1 Based on AmBank Islamic Audited accounts for the past 9 years and 3r quarter interim financial statements as at
31 Dec 2015.
RM'000
Customers Deposit 2007 2008 2009 2010 2011 2012 2013 2014 2015 3Q 2016
Non-Mudharabah 1,028,298 1,328,145 1,858,800 2,230,498 2,537,485 4,608,505 7,644,587 7,980,250 15,851,758 29,521,478
Mudharabah 3,642,756 4,118,186 8,296,270 13,398,040 12,712,170 13,663,353 15,566,655 17,482,251 13,903,118 0
4,671,054 5,446,331 10,155,070 15,628,538 15,249,655 18,271,858 23,211,242 25,462,501 29,754,876 29,521,478
Financial Institutions
Deposit 2007 2008 2009 2010 2011 2012 2013 2014 2015 3Q 2016
Non-Mudharabah 1,590,343 1,600,442 879,424 914,331 1,099,067 1,121,465 530,586 937,905 280,720 1,442,792
Mudharabah 963,224 908,339 1,445,052 1,485,750 368,489 359,840 1,974,135 2,323,453 2,433,344 0
2,553,567 2,508,781 2,324,476 2,400,081 1,467,556 1,481,305 2,504,721 3,261,358 2,714,064 1,442,792
Total Deposits 2007 2008 2009 2010 2011 2012 2013 2014 2015 3Q 2016
Non-Mudharabah 2,618,641 2,928,587 2,738,224 3,144,829 3,636,552 5,729,970 8,175,173 8,918,155 16,132,478 30,964,270
Mudharabah 4,605,980 5,026,525 9,741,322 14,883,790 13,080,659 14,023,193 17,540,790 19,805,704 16,336,462 0
Total Deposits 7,224,621 7,955,112 12,479,546 18,028,619 16,717,211 19,753,163 25,715,963 28,723,859 32,468,940 30,964,270
Total Deposits 2007 2008 2009 2010 2011 2012 2013 2014 2015 3Q 2016
Non-Mudharabah 36.2% 36.8% 21.9% 17.4% 21.8% 29.0% 31.8% 31.0% 49.7% 100.0%
Mudharabah 63.8% 63.2% 78.1% 82.6% 78.2% 71.0% 68.2% 69.0% 50.3% 0.0%
100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 3Q
2016
AmBank Islamic : Mudarabah deposit trend for the past
10 years ended 3rd quarter FYE March 2016 (In RM '000)
Non-Mudharabah Mudharabah Total Deposits
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344
Annexure G
Modus operandi of Murabahah Tawarruq.
Transaction sequence.
Steps Action Activities
1 Customer Place deposit (RM100,000 for 6 months).
Appoint AmBank Islamic as Customer’s Commodity
Purchasing Agent (“CPA”) and as Customer’s Commodity
Sale Agent (“CSA”)
2 AmBank Islamic.
(Purchase commodity
on behalf of
Customer)
Pursuant to CPA executed with the Customer, AmBank
Islamic shall purchase the Commodity on behalf of the
Customer.
AmBank used Customer’s deposits to purchase commodity.
Value of the commodity is equivalent to the value of deposit
made by the Customer (RM100,000-00)
3 AmBank Islamic.
(Customer sell the
commodity to
AmBank Islamic)
Pursuant to CSA, AmBank Islamic shall sell the
commodity to AmBank Islamic itself.
The Selling Price is (assumed) at cost plus profit payable
in 180 days at 3.50% profit rate.
Customer’s Selling Price to AmBank Islamic: Cost : RM100,000-00 Profit {RM100,000 x 3.5% x (180/365)} :RM 1,726-03 Customer’s Selling Price RM101,726.03
The Selling Price is payable to the Customer upon
maturity 180 days later. 4 AmBank Islamic.
(AmBank Islamic
sell the commodity to
3rd party)
AmBank Islamic sell the commodity for RM100,000 on
CASH TERM to a 3rd party.
The proceeds shall be used to pay the Customer together
with RM1,726.03 profit upon maturity, i.e. 180 days after
Customer placed the deposit at AmBank Islamic.
Commodity Murabahah refers to a sale and purchase of an asset where the acquisition
cost and the mark-up are disclosed to the purchaser. Tawarruq consist of two sale and
purchase contract. The first involves the sale of an asset by seller (customer) to a buyer
(bank) on a deferred basis. Subsequently, the buyer (bank) will sell the same asset to a
third party on a cash and spot basis.
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345
Annexure H
Product conversion process
1) 5 new deposit products based on Murabahah Tawarruq have been developed to
replace existing Investment deposit based on Mudarabah contract.
i) Term Deposit-i
ii) Afdhal Term Deposit-i
iii) Am50Plus Term Deposit-i
iv) AmQuantum Term Deposit-i
v) ValuePlus Term Deposit-i
2) The conversion exercise commenced on 15 August 2014 and immediately upon
the renewal of your Existing Deposit.
3) Notification to the Customers on the conversion exercise was issued on
21.7.2014. This notification also serves as a medium to secure customers’
consent for the conversion exercise.
4) Automatic conversion took place if customers continue to keep their deposit
with AmBank Islamic after 15 August 2014. Such continuation shall constitute
customers’ consent and agreeable to the terms & conditions of Commodity
Murabahah-based Term Deposit.
5) This conversion exercise was carried out at no cost to the customers.
6) Any existing legal charges and lien against the deposit shall continue under
customers new term deposits based on Commodity Murabahah.
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346
Annexure I
AmBank Islamic deposit mix.
Source : AmBank Islamic audited accounts and interim results.
CASA : Current Account & Saving Account
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Mac-10 Mac-11 Mac-12 Mac-13 Mac-14 Mac-15 Dec-15
CASA Term Deposits
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347
Annexure J
AmBank Islamic Profitability
Source: AmBank Islamic Berhad Audited Accounts and Interim Results.
Source: AmBank Islamic Berhad Audited Accounts and Interim Results.
439,274
228,115
334,245 348,160 315,958 304,391
209,865
Mac-10 Mac-11 Mac-12 Mac-13 Mac-14 Mac-15 Dec-15
AmBank Islamic's Profit before tax & zakat
(In RM'000)
4.05%
3.17%2.95%
2.34% 2.34%
1.92%
1.37%
1.87%
0.84%1.02%
0.83% 0.70% 0.60%0.39%0.44% 0.39% 0.37% 0.27% 0.21% 0.17%
0.01%
Mac-10 Mac-11 Mac-12 Mac-13 Mac-14 Mac-15 Dec-15
AmBank Islamic's Profitability Ratios.
Net Margin: Net Profit / Total Asset Non Profit Earning Asset / Total Asset
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348
Annexure K
AmBank Islamic Profitability
Source: AmBank Islamic Berhad Audited Accounts and Interim Results.
Annexure L
AmBank Islamic Funding Ratios for the past 7 years ended 3rd quarter FYE
March 2016.
Source: AmBank Islamic Berhad Audited Accounts and Interim Results.
1.87%0.84% 1.02% 0.83% 0.70% 0.58% 0.45%
22.4%
11.3%13.2%
11.9%9.9%
7.9%5.9%
Mac-10 Mac-11 Mac-12 Mac-13 Mac-14 Mac-15 Dec-15
ROA & ROE
ROA ROE
Mac-10 Mac-11 Mac-12 Mac-13 Mac-14 Mac-15 Dec-15
Deposit to Asset 85.7% 82.0% 81.9% 78.5% 81.0% 81.8% 78.1%
Financing Deposit Ratio 79.5% 79.8% 86.0% 86.1% 85.6% 84.7% 88.6%
Financing to Total Funding 77.4% 75.5% 79.3% 81.2% 80.8% 77.5% 77.2%
65.0%
70.0%
75.0%
80.0%
85.0%
90.0%
FUNDING RATIOS