BIBD Introduces Another Shariah Complaint Product
By Zaim Zaini

Bandar Seri Begawan - Following the overwhelming success of the BIBD Investment Certificate launched last September, BIBD has delivered another innovative investment product created for discerning local investors.

Bank Islam Brunei Darussalam Berhad (BIBD), the largest bank in the Sultanate, has proved itself to be a leading player in the development of Islamic financial products, not only locally but also regionally.

In its latest move, BIBD has embarked on what is considered to be one of the most innovative Shariah compliant investment products known as BIBD Certificate of Musyarakah Musahamah & Al-Bai or Tradable Musyarakah Certificate (TMC). The bold move by BIBD to introduce the first Shariah compliant tradable investment product in the region marks another significant milestone in the history of Islamic banking.

This initiative is in line with the government's efforts to inculcate the savings habit among the population, and also in the development of a domestic capital market and a secondary market.

This product provides the opportunity for the general public to participate in an excellent investment alternative, particularly for those seeking better returns in a safe and sound investment programme.

In the conventional terms, this liquid form of investment product is known as the Certificate of Deposit (CD) whereby it allows the certificate to be traded anytime before maturity, which in turn allows the bank to sell the certificates to other interested parties.

Similarly, TMC is based on the concept of Al-Bai whereby the redeemable/ tradable feature provides flexibility and access to liquidity for those who wish to redeem and trade their certificates before maturity.

The Islamic concept applicable to the TMC is the Musyarakah Musahamah which refers to an equitable participation in a joint venture between the bank and the investors, and share the profits (or losses) derived from the business based on the pre-agreed ratio.

For the TMC, the bank will invest the proceeds exclusively into an allocated portfolio of the BLNG Sukuk Al-Ijarah (the 1st corporate Sukuk in Brunei) which is currently subscribed by the bank.

Offering a profit rate which is comparatively higher than the other current six-month term investment yield, each client may invest from one unit which is equivalent to BND5,000 to a maximum of 10 units.

Meanwhile, Perdana World Banking clients will be given the privilege of investing up to BND100,000.

The first issue or value date of the TMC is February 23, 2007 and based on the six-month tenure, the maturity date will be on August 22, 2007.

Due to its limited availability, the bank will only offer the TMC's 1st issue on February 21 and February 22, 2007 and the offer period will be closed earlier upon full subscriptions.

Registration is strictly on a 'first-come-first-serve' basis and can be made only at BIBD Perdana World Banking Headquarters at 4th Floor at 2235745, Kuala Belait Branch or call the nearest branch for further details.

BIBD recently held a public presentation on the BIBD Certificate of Musyarakah Musahamah & AL-Bai' or Tradable Musyarakah Certificate at the Mutiara Ballroom, Sheraton Utama Hotel in the capital. -- Courtesy of Borneo Bulletin

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