Islamic financing has taken a new turn with the introduction of Makkah credit cards.
After the successful launch of Islamic banking, insurance and bonds, the recently launched Makkah card by the First Gulf Bank (FGB) gives customers a chance to perform Haj, considered one of the essential pillars of the Islamic faith.
The interest-free credit credit launched early this year by the Abu Dhabi-based bank allows holders to earn points, described as "steps" by the bank, to travel to the holy city.
For every one dirham spent on the card, users will earn one "step" and accumulation of a certain number of steps will offer them pilgrimage packages to choose from.
Bonus steps are also accrued by those paying their monthly charges on time.
Mohammed Yassin, an Egyptian public relations officer from Abu Dhabi, said he became a customer because it offered him a chance to visit the holy city.
"In the first place, as a religious and god-fearing Muslim, I am happy that I am using an Islamic credit card.
And it is all the better if it provides me with an opportunity to perform Haj," said Yassin, father of two.
Abbas Ali Yousef, a Pakistani businessman who took advantage of the offer and performed Umrah this July, said the only factor that convinced him to use this card and not other Islamic credit cards was the chance to perform pilgrimage.
The bank said the Makkah card, which is approved by the bank's fatwa and Shariah supervisory board, is based on the principles of "goodwill loan", which means users will be charged a fixed monthly administrative charge.
The bank said the card has received an overwhelming response and it expected an increase in the number of customers looking for Islamicoriented banking products.
"Islamic banking is the fastest growing segment of the world's banking industry and FGB recognises and respects the desire of a growing number of its valued customers to conduct their banking and financial transaction in accordance with Islamic Shariah," said André Sayegh, CEO of the First Gulf Bank.
The basic principle of Islamic banking is the sharing of profit and loss and the prohibition of riba (interest).
Among the common concepts used in banking are prof it sharing (mudharabah), safekeeping (wadiah), joint venture (musharakah), cost plus (murabahah) and leasing (ijarah).
© Emirates Today 2007
