DAR AL HARB/ISLAM: CITIBANK, A LA ISLAM

Islamic home loans for everyone

Citibank Bhd's Islamic home financing facility - Citibank Home Partner-i - is flexible enough to allow the borrower to manage during times of unpredictable financing rates and rising costs.

Citigroup Asia head of Islamic banking Rafe Haneef said Citibank Home Partner-i was a syariah-compliant home financing facility based on the concept of “musyarakah mutanaqisah” or diminishing “musyarakah”, which is a co-ownership agreement between the bank and the customer.

“Unlike most Islamic home loans, it is based on a floating base financing rate (BFR) with the added protection of a rate cap.

“This means customers can enjoy savings benefits when the BFR is low. In the event the BFR rises, the customer is protected by the capped rate. If the BFR rises beyond the capped rate, the customers’ monthly payments will still be calculated based on the capped rate,” he said.

Rafe explained that Islamic home financing facilities were traditionally based on fixed rates, which consumers found inflexible especially due to the increasing cost of living.

“Consumers want to be certain that they will be able to manage their budget and finances, especially in an environment of unpredictable financing rates and rising costs,” he added.

Although termed "Islamic", Rafe said Citibank's new facility was targeted at non-Muslims and Muslim home-owners looking to refinance their properties and first-time owners of completed properties.

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Coming to America soon, wrapped up in a pretty package...


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