Islamic Fixed Deposits through Bursa Suq As-Sila’

Apart from the wide array of financing products such as personal, home or car financing, Islamic banks are also able to offer Islamic Fixed Deposits products to its Customers by way of utilizing Bursa Suq As-Sila’ (BSAS).

Islamic Fixed Deposits are based on the concept of Commodity Murabahah (cost-plus sale) where it refers to a deposit product that pays a fixed profit rate until a given maturity date. A specific commodity as deemed fit by the Bank is identified and utilized as the underlying asset for the sale and purchase transaction between the Bank and Customer.

The transactional flow of an Islamic Fixed Deposit executed through BSAS are as follows:

1. The Customer, Ahmad, approaches the Bank intending to enter into an Islamic Fixed Deposit agreement of RM10,000 with a one (1) year tenure. The Bank (as agent of Customer) purchases commodities from the Commodity Suppliers at RM10,000.
2. The Customer sells the commodities to the Bank at RM10,600 whereby the latter pays the former on a deferred/installment basis.
3. The Bank sells the commodities back to the Commodity Suppliers at RM10,000 on cash basis.

In conclusion, the above process achieves what a regular Fixed Deposit would, the Bank acquires a particular amount of deposit while the Customer received regular intervals of profit from the Fixed Deposit.