individual assingment. semoga bermanfaat dan gunakan sebaik mungkin

1. 1
FACULTY OF BUSINESS AND MANAGEMENT
BACHELOR OF BUSINESS ADMINISTRATION (HONS.) ISLAMIC
BANKING
ISB 547
INDIVIDUAL ASSIGNMENT
Bank Islam Credit Card-i by Bank Islam
PREPARED FOR:
MISS RABIHAH BINTI NAWAWI
PREPARED BY:
MUHAMMAD AFIQ FATHI BIN AB PATTAH
(2020194239)
SUBMISSION DATE
WEEK 10

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CONTENTS
INTRODUCTION OF THE PRODUCT ...........................................................................................3
CHARACTERISTICS......................................................................................................................4
BENEFITS....................................................................................................................................5
EVIDENCE FROM HADITH AND QURAN....................................................................................7
ADVANTAGES IN COST OF LIVING.............................................................................................8
CONCLUSION .............................................................................................................................9
RECOMMENDATION..................................................................................................................9
REFERENCES.............................................................................................................................10

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INTRODUCTION OF THE PRODUCT
Bank Islam Card (“BIC”) is the first purely Shariah contract-based credit card to be
offered to Muslims and non-Muslims in Malaysia. This card is completely free from any riba
or gharar.
Riba is usually translated as “interest” which means an extra amount charged in
transactions dealing with silver, gold or money. Gharar is defined as uncertainty or ambiguity.
Be assured that neither riba nor gharar is attributable to the Bank Islam Card-i. The Shariah
concept that is being used in the operations of BIC is Tawarruq.
Tawarruq means the purchase of commodity on differed payment basis by way of either
direct sales or cost plus sales. The commodity is then sold for cash to a party other than the
original seller.
Discussion among the majority of classical Muslim scholars on tawarruq was done
simultaneously with bai’ al-‘inah. In fact, they do not differentiate the discussion on tawarruq
and bai’ ‘inah; except the scholars of Hanbalis who have distinguished it.
Generally, tawarruq and bai’ ‘inah are similar in terms of its objective to obtain cash
through the selling and buying transactions, but they are different in two aspects. Firstly, bai’
‘inah does not involve third party as purchaser of the object of sale (asset/commodity), while
tawarruq involves third party. Secondly, the sales object in bai’ ‘inah is returned back to the
original owner, whereas in tawarruq, there is no such condition.

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CHARACTERISTICS
1) Type of card.
Credit cards are all different, but they can be divided into three main groups: secured cards,
regular cards and premium ones.
2) Grace period
The number of days by the end of which you have to pay your bill in full.
3) The method of calculating the financial charge.
The dollar amount you give to use credit, which is partially influenced by your outstanding
balance and the so-called annual percentage rate, or APR. Companies employ a variety of
techniques to calculate your outstanding balance, and the way they do that can have a major
impact on the financial charge.
4) Cash advance features.
This is especially important if you are going to use cash advances, so get detailed information
about access to ATM and so on.
5) Credit limit.
Some cards set their own credit limits even if you qualify for more.
6) Rewards and bonuses.
These can include various extra points, gifts and services for you to enjoy your credit card
more.

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BENEFITS
Shariah Compliant
For Muslims, an Islamic credit card is an assurance that the financial product is Shariah
compliant and adheres to Islamic teachings. Islamic banking adheres to Shariah, which is the
Islamic religious law as defined in the Quran, hadith and sunnah. The difference between
conventional and Islamic banking is that no money is actually loaned to the client as the bank
will “buy” the item for clients and sell it back to them at a marked-up price. Islamic banking
has the same purpose as conventional banking except that it operates in accordance with the
rules of the Shariah, known as fiqh Al-Mua`malat (Islamic rules on transactions).
Takaful coverage
Bank Islam credit cards also offer takaful coverage for the cardholder. Takaful is a type of
Islamic insurance, where members contribute money towards a pooling system that will be
used in the event of losses or damage. Takaful is a Shariah compliant insurance option
grounded in Islamic Muamalat (Islamic transactions) products. The takaful industry in
Malaysia is also regulated through the Islamic Financial Services 2013 act. Takaful coverage
is available for anyone, and one does not have to be Muslim to take on takaful coverage.
This means that cardholders will be protected in the event of an unfortunate circumstance such
as total permanent disability or death. Family members of the cardholder will not be burdened
by the outstanding card balance.
Convenience of zakat payment
Zakat is the third pillar of Islam and is wajib (compulsory) on Muslim’s who meet all the
conditions. Technically Zakat means a fixed proportion collected from a specific type of mal
(wealth) when they reach the haul (specific term) which must be distributed to specific
categories of people. Zakat is an assigned amount that is worth 2.5% of your wealth which is
to be paid to the community. The community is then to use the Zakat contributions to support
the less privileged among them. Islamic credit cards offer the convenience and hassle-free way
of making zakat payment without having to go to a zakat centre.

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CONTRACT APPLIED
The Shariah concept used is Tawarruq, i.e. the purchase of a commodity (i.e. assets to be
transacted in the order of Tawarruq) on deferred payment basis by way of either Bai’
Musawamah or Bai’ Murabahah. The commodities are then sold for cash to a party other than
the original seller. Tawarruq concept is further described as below. The customer purchases the
commodity from the Bank on Murabahah basis at the Bank’s Sale Price. In this arrangement,
the purchase will be performed by the Bank as the Purchase Agent for the customer. As the
Sale Agent for the customer, the Bank shall sell the commodity to a commodity purchaser at
cost price. Proceeds from the transaction will be credited for customer’s utilization. The
customer is obliged to pay the amount due from the Murabahah transaction as per the agreed
terms.
“Commodity” means any commodity acceptable to the Bank e.g. palm oil, plastic resin, rubber,
cocoa beans, soy beans, timber and metal (excluding gold and silver) traded at any commodity
trading platform approved by the Bank. The purchase and sale of the commodity are performed
based on the mandate of the customer, where the Bank as Purchase Agent and Sale Agent trades
the Commodity as made available and provided by commodity providers subject to the Bank
prevailing policies.

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EVIDENCE FROM HADITH AND QURAN
The Holy Qur'an's Shari'ah precepts and injunctions, as well as the Sunnah and legal maxims,
form the basis of Tawarruq. As stated in Surat Al-Kahf.
In this way We raised them up until they asked each other. One of them said, “How long did
you tarry?” They said, “A day, or part of a day.” They said, “Your Lord knows best how long
you tarried.” So, send one of you with this silver (coin) of yours to the city and let him look
around which of the eatables are the purest and let him bring you some food from there. And
he must act in polite manner, and must not let anyone know about you. – Mufti Taqi Usmani
In time We woke them, and they began to question one another. One of them asked, ‘How long
have you been here?’ and [some] answered, ‘A day or part of a day,’ but then [others] said,
‘Your Lord knows best how long you have been here. One of you go to the city with your silver
coins, find out where the best food is there, and bring some back. But be careful not to let
anyone know about you. – Dr. Ghali
And in like manner We awakened them that they might question one another. A speaker from
among them said: How long have ye tarried? They said: We have tarried a day or some part
of a day, (Others) said: Your Lord best knoweth what ye have tarried. Now send one of you
with this your silver coin unto the city, and let him see what food is purest there and bring you
a supply thereof. Let him be courteous and let no man know of you. – Abdul Haleem

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ADVANTAGES IN COST OF LIVING
Recordkeeping
A credit card provides a useful record of your spending through your monthly statement and
online account, which would also be the case if you relied on a debit card for spending. Some
credit cards do send yearend summaries, though, that can be a great resource when you’re doing
your taxes.
Convenience
You don’t have to worry about how much cash you have on hand. Just remember that you can
always use a debit card instead. With a debit card you won’t be in danger of accumulating debt
that will be subject to high interest charges if you don’t pay it off each month, like you would
with a credit card. Remember to keep track of your checking account balance to be sure you
can cover what you’re buying.
Build credit history
Credit scores, taken from records of your financial activity, are essential if you plan to borrow
money. These scores come partially from your credit card history. Unlike debit card use, credit
card use is reported to the bureaus that monitor scores. A track record of paying a credit card
balance on time helps your score immensely. And the longer you use credit cards, the more
you’ll build your credit history, improving your score even more.

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CONCLUSION
In conclusion, Bank Islam Credit Card-i by Bank Islam provide a convenience to consumers
acting as both a method of payment and a flexible credit instrument. It has many functions and
benefits, which helps people with structuring their money. Carrying cash around is very
irritating since it can get lost very easily which can cause many problems.
RECOMMENDATION
In my opinion credit cards should be advertised and used more often, I personally recommend
everyone to consider using it because the consumer can get a lot of benefit from the Bank Islam
Credit Card-i. First, the consumer can build their credit score so if the credit score of the
consumer is good, the consumer can easily apply any loan from the Bank Islam. Next, Bank
Islam Credit Card-I give a consumer cash back and a lot of rewards points.

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REFERENCES
https://www.bankislam.com/personal-banking/bank-islam-cards/bank-islam-credit-card-i/
https://www.rba.gov.au/publications/rdp/2018/2018-11/conclusion.html
https://www.creditkarma.com/credit-cards/i/credit-card-utilization-and-your-credit-score