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  PERSONAL FINANCE

Shari’ah related FAQs

1. What is ‘Dubai Islamic Personal Finance’ (DIPF) product ?

Dubai Islamic Personal Finance (DIPF) product is a Halal substitute to conventional ‘Personal Loan’ product. It is the First Shari'a Compliant Personal Finance product of Pakistan.

2. What are the needs that can be fulfilled from DIPF?

DIPF facility is granted to Customers for meeting their personal needs in a Halal way. Such as Education, Marriage, Medical Expenses, Settling of outstanding Conventional Loans OR for meeting any emergency needs,in an Islamic Way.

However, any need other than cash can be catered to via other appropriate available products. DIPF shall be offered only in cases where the ultimate need can be fulfilled only through cash.

3. How DIPF is Shari’a Compliant?

DIPF facility is based on the concept of ‘Musawamah’, therefore; it is Shari’a Compliant.

4. What is Musawamah?

It is a type of sale in which a seller sells his goods without disclosing cost and profit. It’s a normal sale transaction. The sale price could be paid on spot or deferred, to be paid in lump sum or in installments.

5. How does DIPF product work?

The Bank purchases specified goods (e.g. wheat, sugar, fabric etc.) from a supplier, directly or through an un-disclosed agent (Broker & Alliance Partner) on spot payment basis. After taking the title and possession of the assets, the Bank sells the same to the Personal Finance customer on deferred payment basis. The customer after taking the constructive possession of goods may liquidate these goods and fulfill his personal need from these proceeds.

5. How does DIPF not inherit the element of Buy Back (بیع العینة)?

Buy Back transaction refers to the process of purchasing the commodity for a deferred price, and selling it for a lower spot price to the same party from whom the commodity was purchased. However, in DIPF product, the goods are purchased from a commodity supplier first, then the same goods are sold to the DIPF Customer(s) and the Customer liquidates these goods by selling it to the Broker/ Alliance partner.

6. How DIPF will help the Customers in getting rid of their Riba Based outstanding loans?

If anyone has taken a Riba based personal loan facility from a conventional bank, and he wants to get rid of the same can avail the Balance Transfer Facility (BTF) under DIPF product.

7. What is Balance Transfer Facility (BTF)?

A balance transfer facility is the transfer of (part of) the balance (either money or credit) in an account to another account, often held at another Financial Institution. BTF can be used to take care of your financial needs such as:

  • Credit Card Bill Payments: BTF makes life easier by proposing the opportunity to pay off the amount due on your conventional bank credit card at a lower BTF rates.
  • Conventional Loan Payments: When you need to make a payment to your outstanding conventional loan payments. So enjoy the convenience of paying your outstanding loans through our BTF Facility.

8. How DIPF is different from Conventional Personal Loans?

A Conventional Personal Loan product is based on the Concept of Loan (Qard). The conventional bank lends money on the basis of Qard and charges an additional amount in the form of interest. “Any amount charged over a transaction of Loan is Riba” therefore the conventional Personal Loans are impressible according to Sharia.

  • The source of definition of Riba: MusanafIbneAbi Sheba – Vol 04. Hadith: 20690 & Musnadul Harith – Vol 01. Hadith:437

9. How DIPF is different from Conventional Personal Loans?

A Conventional Personal Loan product is based on the Concept of Loan (Qard). The Conventional Banks lends money on the basis of Qard and charges an additional amount in the form of interest.“Any amount charged over a transaction of Loan is Riba” , therefore; the Conventional Personal Loans are impermissible according to Shari’ah. However; DIPF is a sale transaction based on Musawama.

10. What is the penalty in case of late payment and rebate in case of early payment?

Since,DIPF is based on the concept of Sale, the sale price is agreed at the time of sale culmination, however; In case of late payment the Customer would be liable to pay a charity amount calculated on a daily basis and a year of 365 days, equivalent to 35% of the outstanding payment to be utilized by the Seller for charitable purposes as approved by the Shari’ah Board / Resident Shari’ah Board Member of the Seller. Rebate might be given at the discretion of Shari’ah Advisor on case to case basis. It cannot be pre-agreed.

Incase of early payment, the sale price will remain same. However; the Customer will be required to submit his case with a written request to Collection Department/Service Center/Branch/Sale Representative at least one week prior to the installment date.

11. What will be the mode of payment of installment?

The customer can provide post-dated cheques of his bank account. For Customers having an account in DIBPL, the installment can be directly debited from their account.

12. What if, the customer dies within the financing period?

If the applicant dies during the financing period, then applicant’s legal heirs would be liable to pay off the remaining installment amount.

Product related FAQs:

13. Can co-applicant’s income be clubbed for the approval of financing limit?

Co-applicant’s income is not required to be clubbed for enhancement of the financing limit. Only applicant’s income will be considered for the approval of financing limit.

14. How much time does the Bank take to approve the case?

Generally cases are processed and approved within 2-3 weeks, subject to submission of complete documentation / information.

15. What are the costs associated with availing the DIPF facility?

The customer will need to pay Processing Fee:

  • PKR 4,000 + FED for New Bookings
  • PKR 3,000 + FED for Balance Transfer

The fee is charged subject to approval of facility. This fee will be inclusive of all legal documentations, verification and other charges etc.

16. Is the processing fee refundable to the Customer in case his application is rejected?

Processing fee is charged after the case is approved. Therefore if the application is rejected there is no need for refunding the same.

17. What is the maximum limit of DIPF facility?

We offer this facility ranging from Rs. 50,000 to Rs. 2 million. The facility amount and the tenure for individual cases are based on the sole discretion of the Bank.

18. What is the minimum and maximum tenure for DIPF?

The minimum tenure for DIPF is 6 months and the maximum tenure is 60 months. We offer this facility in the multiples of 6 months. You can choose a tenure ranging from 6, 12, 18, 24, 30, 36, 42, 48, 54 or 60 months).

19. What is the eligibility criterion for DIPF Facility?

  • Pakistani national & permanent resident of Pakistan
  • For Salaried Segment: Minimum 20 years and Maximum 60 years of age at the time of maturity.
  • Businessman & SEP: Minimum 20 years and Maximum 65 years of age at the time of maturity.
  • Salaried segment, minimum gross income of PKR. 35,000 /- to 40,000/-per month.
  • For SEP & Businessmen segment, minimum gross income of PKR 50,000/- per month.

20. Who can apply for DIPF?

Following people can apply for DIPF:

  • Existing DIB customers
  • New to bank salaried and self-employed customers
  • Balance transfers including credit cards

21. Is the DIPF facility available in all cities of Pakistan?

The DIPF product at the sole discretion of DIBPL is available in the cities of Karachi, Lahore, Islamabad, Rawalpindi, and Faisalabad only and subject to change from time to time.

22. What if, the Customer doesn’t need financing facility after execution of the transaction?

In case the Customer doesn’t continue availing the facility after execution of the Transaction he will have to pay the processing fee to the Bank.

23. What are documents required for DIPF facility?

a. Personal Information:

  • Application form duly signed
  • 2 recent Passport-size photographs of the applicant
  • Copy of Applicant’s Current CNIC
  • Relevant documents (Income Documents etc.. as per customer category)

b. Income Information

Salaried Individuals:

  • Original / Certified copy of Bank Statement showing Salary Credit for last 06 months OR
  • Original / Certified copy of Pay Slip for last 03 months
  • Employer's certificate including Tenor /Designation /Salary

Business Individuals:

  • Original / Certified copy of Bank Statement (last 12 months)
  • 2 years Proof of Business (e.g. Tax return / Bank Certificate/ NTN Certificate / any other document)

c. Employment and Business Tenure:

Salaried

  • Permanent job with minimum 2 year continuous working history in a same company.
  • Direct company contract valid till maturity date of financing (Total 1 year previous working experience is mandatory). SEP & Business Individuals:
  • Permanent job with minimum 1 year continuous working history in a same industry.
  • Direct company contract valid till maturity date of financing (Total 1 year previous working experience is mandatory).

24. What is EMP?

EMP stands for Equated Monthly Payments. This Payment comprises both principal and Profit components. Please use the EMP Calculator to find out the EMP you need to repay.

25. What are the likely dates for repayment through Equated Monthly Payment (EMP)?

The EMP date can be 3rd, 11th, 15th, 21st and 27th of the month depending on the date of disbursal.

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