Trade Financing

Under this concept, the Bank acts as an Agent of the customer.

• The customer informs the Bank of his Letter of Credit-i requirements and requests the Bank to provide the facility.
• The Bank may require the customer to place a deposit to the full amount of the price of the goods to be purchased/imported which the Bank accepts under the principles of Al-Wadiah Yad Dhamanah.
• The Bank establishs the Letter of Credit-i and pays the proceeds to the negotiating bank utilising the customer’s deposit; and subsequently releases the documents to the customers.
• The Bank charges the fees and commission for its services under the principles of Al-Ujrah.

• Trust Receipt-i is a trade finance facility offered by the Bank to facilitate customers’ importation/purchase of goods which are relevant to their business. Prior to the financing, the customers have to establish a letter of credit for settlement of the related transaction with the seller/exporter.
• Under this arrangement, the customer informs the Bank of his requirement and requests that the Bank purchases/imports the intended goods by establishing Letter of Credit-i with the Bank. The customer also undertakes to purchase the said goods from the Bank upon negotiation or acceptance of the said credit under the principles of Al-Murabahah or lump-sum deferred payment sale.
• Upon negotiation of a sight Letter of Credit-i or maturity of a usance Letter of Credit-i, the Bank pays the proceed to the negotiating/accepting Bank and subsequently then sells the goods to the customer. The Bank’s selling price comprises its cost and a profit margin that will mature on a specified future date.

• Accepted Bills-i, commonly known as IAB is a very useful facility to boost your liquidity requirement, whether as an importer, an exporter, a manufacturer or a trader.
• IAB is an alternative to the conventional Bankers Acceptance (BA). It is a relatively cheaper form of short term financing for both external and domestic trade as the profit margin is benchmarked to the Islamic Inter-Bank Money Market rates (Profit is calculated at fixed rate for the period of financing).
• Under Murabahah arrangement, payment to supplier can be made immediately and you, being an importer may match your differed payment to us according to your ageing of credit terms. Hence, IAB will help a trader to obtain a discount from the supplier as payments by the Bank is on cash term.
• In financing of usance sales of residents/non-residents, IAB will facilitate sourcing of immediate funds for working capital for manufacturers who want to increase sales by offering competitive credit terms to their customers.

• MWCF-i is the financing of trade by way of lump sum deferred payment cost plus profit sale. It can be extended to facilitate in purchasing stocks, inventories, parts or semi-finished goods and raw materials.
• Under MWCF-i the Bank appoints the customer as its agent to purchase the required goods on its behalf and settles the purchase price (at sight or upon maturity for usance bill) to the supplier. The Bank subsequently sells the goods to the customer at an agreed price comprising the purchase price and the profit margin and allows the customer to settle the price on a differed term. The Bank’s profit margin will be benchmarked to the prevailing funding cost plus the approved margin. However, once the Sales Price is contracted, it will be fixed until its maturity. On due date, the customer pays the bank the agreed sale price in full.

• Documentary collections for import and export are operated under the principles of Al-Wakalah (Agency). Under this facility the Bank acts as a collecting or paying agent to you.
• Through our international network, we ensure your import and export settlements can be carried out efficiently at minimum charges.

• A deferred payment contract or sales give rise to a debt. While waiting for the payment, the creditor may sell the debt to Bank at an agreed price and undertakes to recover the amount from the debtor upon its maturity. This facility is an alternative to conventional discountings.
• Under this agreement, the customer who wishes to avail himself to this facility, forwards to the Bank the debt documents in relation to his contract. In addition the customer is also required to submit the Assignment of Payment from their Awarding Party.
• When the Bank is satisfied that all the terms and conditions of the facility have been complied with, we will purchase the debt and proceeds will be credited into customer’s account. This will facilitate the customer’s cashflow for generating further business contracts.

• The Bank Guarantee-i constitutes an undertaking to guarantee the performance in your business obligation to a third party in case of any default.
• The Bank Guarantee-i may be issued to cover the following needs:
• Tender Guarantee
• Performance Guarantee
• Guarantee for Advance Payment
• Guarantee in Lieu of Security Deposit/Supply Guarantee
• Guarantee for Sub-Contract
• Guarantee for Exemption of Custom Duties
• Custom Bond
• Guarantee for maintaining Ledger Account
• Guarantee for Honouring of Cheques

• Shipping Guarantee-i helps the importer to clear the purchase goods under Letter of Credit-i while awaiting presentation of the shipping documents.
• It saves you from incurring additional charges for storage and clearance of goods by the Port Authority while awaiting the arrival of the shipping documents.

• All individuals, both Muslims and Non Muslims aged 18 years and above.
• Business enterprises, societies and other organisations acceptable to EONCAP Islamic Bank.

Documents Required
Documents requested by the Bank as evidence of the transaction i.e. purchases or sales to be transacted.

All applications are subject to the Bank’s terms and conditions.