Islamic Bank Guarantee (BG-i)
WHAT IS THIS PRODUCT ABOUT?
A credit enhancement facility to secure an obligation by Customer for financial and non-financial guarantee in favor of the Beneficiary.
Based on approval of BPMB’s Approving Authority.
Up to the period of the project requirement with the option to extend the guarantee period.
Serves as additional period for beneficiary to claim from BPMB after maturity of the guarantee period.
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Customer is required to reimburse the claimed BG-i facility amount by the next day (T+1) the payment is being released to the Beneficiary.
WHAT IS THE SHARIAH CONCEPT APPLICABLE?
The facility is structured based on the Shariah concept of Kafalah, which is described as a guarantee. BPMB provides financial and/or non-financial guarantee on specific tasks or liabilities assumed by Customer to a Beneficiary (third party).
The brief structure and flow are as follows:
- Customer enters into a contractual agreement with the Beneficiary. To mitigate the breach of contract, Beneficiary shall request for a security by Customer in the form of BG-i facility.
- Customer approaches BPMB to request for the BG-i facility. BPMB assess the feasibility of the request and Customer’s credit-worthiness.
- BPMB issues BG-i facility to Beneficiary as per Customer’s requirement, as a surety to discharge the liability of Customer in the event Customer defaults.
- In the event of default by the Customer, Beneficiary will claim BG-i facility from BPMB. BPMB will make immediate payment on first demand provided the claims meet all conditions of the guarantee.
- Customer is obligated to pay BPMB on the claimed amount together with ta’widh (late payment charges) and other costs, if any.
- If there is no default, the Beneficiary will return the BG-i facility to the Customer followed by BPMB’s cancellation upon maturity.
WHAT ARE MY OBLIGATIONS?
- Customer is required to pay the fees and charges timely before the issuance of BG-i.
- Upon liquidation of BG-i facility, Customer must reimburse BPMB immediately. Failing which, Customer is subject to the Late Payment Charges.
WHAT ARE THE CHARGES THAT I HAVE TO PAY?
The facility may attract the following fees and charges, whichever applicable:
- BG-i issuance fee.
- Stamp Duties as per the Stamp Duty Act 1949 (Revised 1989).
- Changes to the Letter Offer Fee.
- Legal Fee, as charged by solicitor.
Calculation of BG-i fees as follows:
1.5% per annum or 0.125% per month of the guaranteed amount.
RM1,000,000 x 1.5% p.a X (24 months/12months) = RM30,000
DISCLAIMER : Figures displayed are for illustration purposes only
WHAT IF I FAIL TO REIMBURSE CLAIMED BG-i FACILITY AFTER LIQUIDATION?
- Ta’widh at 1% per annum on the overdue instalment (where applicable) during the tenure of the facility.
- Ta’widh based on the overnight daily Islamic Interbank Money Market (IIMM) rate or any benchmarks rate approved by Bank Negara Malaysia may specify against the outstanding balance if the overdue continues beyond the maturity date of the Facility.
- Gharamah (Penalty) at 0%.
Legal action may be taken against you by the Bank if you fail to respond to reminder notices. It may affect your credit rating which may lead to credit being more difficult or expensive to you.
The Bank also retains the following rights:
- Review: the Bank has the right to review and terminate the facility upon occurrence of any events of defaults as agreed in the terms and conditions of the facility.
- Bankruptcy: the Bank has the right to initiate bankruptcy proceedings if the outstanding amount reaches a certain limit.
WHAT DO I NEED TO DO IF THERE ARE CHANGES TO MY CONTACT DETAILS?
It is important that you inform us of any change in your contact details to ensure that all correspondences reach you in a timely manner.
WHERE CAN I GET ASSISTANT AND REDRESS?
If you have any enquiries with regard to the facility, you may contact:
Level 26, Menara Bank Pembangunan
Jalan Sultan Ismail, Kuala Lumpur
Tel: 03-2611 3124
If you wish to complain about the products and services provided by the Bank, you may contact:
Level 27, Menara Bank Pembangunan
Jalan Sultan Ismail, Kuala Lumpur
Tel: 03-2611 3888
If your query or complaint is not satisfactorily resolved by the Bank, you may contact:
Bank Negara Malaysia LINK or TELELINK
Block D, Bank Negara Malaysia
Jalan Dato’ Onn
50480 Kuala Lumpur
Fax: 03-2174 1515