Al-Rajhi bank unveils Commodity Murabahah

Al Rajhi Bank Malaysia on Monday introduced Collateralised Commodity
Murabahah-i (CCM-i) as a new instrument for its Treasury use and is
pleased to be the first Islamic financial institution to adopt such
instrument in managing its daily money market transactions. The
announcement was made at their Kuantan Branch launching ceremony which
was graced by YAB Dato' Seri DiRaja Adnan Yaakob, Menteri Besar Pahang.

On
a similar note, in its recent announcement, Bank Negara Malaysia (BNM)
has recently introduced the Collateralised Murabahah instrument. CCM-i,
based on a Commodity Murabahah transaction and backed by a pledge
mechanism, was introduced as an alternative solution in addressing the
urgent demand of Islamic banks in managing their liquidity. It is a low
credit-risk financial instrument for the Islamic interbank money market
players under the Bank Negara Malaysia's Standing Facility guideline;
enabling Islamic banks to tap on liquidity by utilising their holdings
of tradable sukuks and other acceptable Islamic securities as pledge
for their liquidity requirements.

"The introduction of CCM-i is
another important milestone for Al Rajhi Bank as it has met the
requirements of the syariah standards of both Malaysian and Saudi
Arabian scholars", said Azrulnizam, chief executive officer, Al Rajhi
Bank Malaysia.

This is achieved by precluding the principles of
Bai' Al Inah (sale and buyback), Bai' Dayn (trading of debt), Wa'ad
(undertaking) and Tawarruq Munazzam (pre-arranged transaction between
multiple parties).

On a related note, positive development is
already underway for the CCM-i in which Treasury members of the
Association of Islamic Banks in Malaysia (AIBIM) are reviewing the
instrument to be accepted as industry standard. It is hoped that with
the coordinated efforts among industry players, and the support from
Bank Negara Malaysia and the Shariah advisors; will boost this
initiative to another level in developing an internationally accepted
Islamic money market that opens up for more cross border transactions
in future.

Al Rajhi Bank opened its first Malaysian branch five
years ago in Kuala Lumpur and now has 23 branches in the Klang Valley
and other state capital cities throughout Malaysia. It was recently
accorded with the Malaysia Service to Care Award 2012 (MSCA) for the
category of The Best of Malaysia Service to Care Award (Islamic
Banking).

About Al Rajhi Bank Al Rajhi Bank, the largest Islamic
banking group in the world is recognised for being instrumental in
bridging the gap between modern financial demands and intrinsic Islamic
values. One of the fastest growing and most progressive banks in Saudi
Arabia, it owes its banking excellence to its unwavering commitment to
Shariah principles and the use of technology to offer diverse products
to meet customer needs. The Group has a vast network of over 700 bank
branches and remittance centres, 3,500 ATM machines and over 21,000 POS
installed throughout the Kingdom.

Leveraging on its established
principles and operations in the Middle East, Al Rajhi Bank ventured
out as an international bank by setting up its first overseas
operations in Malaysia, launched in February 2007. Operating on the
same platform as the home bank, Al Rajhi Bank Malaysia extensively uses
the latest banking technology to consistently provide customers with
speed and convenience in banking. To date, it has 23 branches, 15 in
the Klang Valley, one in Johor Bharu, Melaka, Penang, Kuching, Kota
Bharu, Ipoh, Kuantan and Kota Kinabalu respectively.

Plans are
in the way to open a few more this year. Al Rajhi opened it Affluent
Banking flagship branch in Menara BRDB in Bangsar in 2010 to cater to
its high net worth customers. Offsite ATMs are now located in many
locations throughout Malaysia, with KLIA and LCCT ATMs deployed in July
2011. Its remittance business, Money Transfer i-Tahweel ("i-Tahweel")
is currently available at its i-Tahweel Centres in Melaka, Klang and
Central Market. The services are also offered through any Al Rajhi Bank
branch nationwide.

The bank is expanding its suite of products
and services that currently offers customised corporate and investment
banking products which include amongst others project financing, term
financing, working capital financing, trade finance facilities and cash
management services. The Retail banking products includes Savings
Account-i, Current Account-i, Personal Financing-i, Charge Card-i,
Debit Card-i, Fixed Term Investment-i, Money Transfer i-Tahweel,
Automobile Financing-i, Home Financing-i, Structured Home Financing-i
and the award winning Al Musafir Card-i. As of February 2012, Al Rajhi
has a customer base over 150,000 and the number is steadily growing.

Al
Rajhi Bank has been recognised with the following awards (amongst
others): • Financial Insights Innovation Award 2008 (FIIA) Special
Citation for Islamic Payment Switch (IPS) for Al-Musafir Card-i • KLIFF
Islamic Finance Awards 2010 Most Outstanding Islamic Bank • Islamic
Finance news Awards 2010 - Malaysia Deal of the Year - Cagamas Sukuk
ALIm - Best Retail Islamic Bank • 2010 IFR Asia Awards Islamic Deal of
the Year Award - Cagamas Sukuk ALIm • Financial Insights Innovation
Award 2011 (FIIA) Product Innovation (Islamic Banking Product) -
Cagamas Sukuk ALIm • Aon Hewitt Best Employers in Malaysia 2011 • Aon
Hewitt Best Employers in APAC 2011 • RAM League Awards 2011 - Lead
Manager Award Islamic 2010 Programme Value (2nd) - Malaysian Innovation
of the Year - Cagamas Sukuk ALIm - Industry Recognition Award • The
Asset Triple A Islamic Finance Awards 2011 - Islamic Deal of the Year
for Cagamas one billion ringgit Sukuk Al-Amanah Li Al-Istithmar - Best
Islamic Deal, Malaysia for Cagamas one billion ringgit Sukuk Al-Amanah
Li Al-Istithmar • KLIFF Islamic Finance Awards 2011 - Most Outstanding
Islamic Bank • Islamic Finance news Awards 2011 - Best Retail Islamic
Bank • 2012 Malaysia Service to Care Award (MSCA) - The Best of
Malaysia Service to Care Award (Islamic Bank) • The Asset Triple A
Islamic Finance Award 2012 - Best Islamic Structured Product for Wakala
bi al-Istithmar Investment Account. -- Bernama