Mudarabah Saving (Ordinary Mudarabah) Account

Mudarabah is a form of partnership in profit whereby one party or customer provides capital (rab-al-maal), and the bank offers management, skill, or labor (mudarib). The capital provider has granted the mudarib to undertake any lawful business activities. It is the responsibility of mudarib/bank to invest in any suitable investment reasonably expected to yield higher profit, shared as per the pre-agreed profit sharing ratio. Mudarabah can be in the form of a savings account or time deposit. The following are some of the Mudarabah saving accounts.

Coopbank – Islamic savings account is offered to depositors primarily to fulfill their precautionary motives of saving money and meeting some of their transaction and investment needs where relevant. Depositors save their money for the benefit of profit-sharing for an undefined time. The profit rate to be paid is determined based on the pre-agreed profit sharing ratio and the bank’s performance during the profit payment period. Savings accounts are designed specifically to meet the needs and requirements of customers who authorize the bank to invest their deposited money. Customers can deposit or withdraw funds at any time; thus, actual profits are shared at the ratio publicized by the bank and agreed between the two and on the basis of the monthly average balance.

The account is operated by the use of a passbook exclusively prepared for the purpose. The minimum balance to open this account is Birr 500.00 (Five Hundred) only.  Accounts that shortfall the minimum monthly average deposit balance of Birr 1000 (One Thousand) on profit payment period shall not be eligible for profit sharing. Customers are allowed to withdraw from their credit balance without any restriction/limitation as to its amount and timing.

Please contact COOP bank Islamic to get more detailed information and advice

Wadiah Current Account

Wadi’ah current account is similar to the conventional current account, and it is a non-profit bearing account which is opened and operated by literate customers, however; in rare cases, illiterate customers shall use this account by using their stamp printed by his/her name or signature in addition to the standard signature. The operation of the account can be performed through the use of cheques provided by the Bank to Wadi’ah account holders. The bank can invest all outstanding amounts in its absolute discretion, deems fit, and no returns of whatsoever nature is paid out to customers on this account. A minimum amount of Birr 500.00 is required to open an account for individual customers, and Birr 1000.00 is required for corporate and business customers.

Qard Contracts

Interest-Free Export (Qard) Financing Facility Qard (Pre-shipment Export Financing)

An Interest-Free loan is the transfer of ownership in fungible wealth to a person on whom it is binding to return wealth similar to it.  It is a loan and Advances granted to borrowers to be repaid only the availed principal amount within the agreed period and term in which Interest-Free Banks provides it.

Why the product is needed?

This financing facility allows a customer to finance his/her/its need at a varying amount of financing, which can be obtained from Interest-Free Banks. Further, the need for Interest-Free financing is purely on cooperation and mutual help, for instance, to help a customer to release himself from financial hardship or to meet the general working capital need. The financing scheme also concerns the customer welfare by receiving off interest payments on the loan and by providing rebates to reduce the customer payback burden.

Shari’ah Requirement

The financing facility is one of the primary functions of Interest-Free banks. Financing is the activity that contributes to an Interest-free bank’s profit generation. Interest-Free Banks are prohibited from making loans with interest. But customers may need direct financing to get extra liquidity to address their working capital requirements though it is technically or financially difficult for them to share the profit with the financing bank for the use of the fund.  Hence, IFB can provide short term financing in the form of an Interest-Free loan for ECX traded commodity Exporters under the circumstances without any gain from the financing.

It is required by Shari’ah not to collect any more amount than originally availed by the lender.  But penalty may be imposed on the borrower if there will be a delay in payment and/or any default against the contractual terms and conditions to discourage defaults.

Qard (Foreign Employment Agency)

Please contact Coopbank Islamic to get more detailed information and advice