Products and Services Offered by Abu Dhabi Islamic Bank

This article discusses the various products and services offered by Abu Dhabi Islamic Bank, including corporate banking solutions, wealth management, and personal finance options. It also highlights the differences between Islamic banking processes and conventional bank processes, using examples such as automobile loans and home financing.

Running head: FINANCIAL MARKETS AND INSTITUTES
Financial Markets and Institutes
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1FINANCIAL MARKETS AND INSTITUTES
Table of Contents
Introduction......................................................................................................................................2
Products and services offered by ADIB..........................................................................................2
Differentiated banking mechanism than the conventional banks....................................................2
Conclusion.......................................................................................................................................4
References........................................................................................................................................5

2FINANCIAL MARKETS AND INSTITUTES
Introduction
“Abu Dhabi Islamic Bank” established in 20 May 1997 is listed as a Public Joint Stock
Company through “Amiri Decree No. 9 of 1997”. The formal initiation of the commercial
operations of the bank started in 11 November 1998. These operations of the bank are discerned
with “paid-up capital of one billion dirhams” and further segregated into one “hundred million
shares”. The value of the individual shares of the company is observed with the shares quoted as
per “Abu Dhabi Securities Market” (Adib.ae, 2018).
Products and services offered by ADIB
The corporate banking services of the company is seen to offer different Islamic Banking
solutions such as Murabaha, Istisnaa, Ijara, the drawings covered by Islamic regulations and
different types of other Sharia compliant products (Adib.ae, 2018). The corporate banking
solutions also includes diversified private sector base of “Trading, Transportation, real estate and
target market of the bank”. The wealth management experts of the bank include insightful
decisions for the savings and decisions on select asset classes based on diverse investment
themes such as “oil, gold and group of equities”. The bank offers capital protection plan and
recommendations to the investors of different time horizons (Adib.ae, 2018).
Differentiated banking mechanism than the conventional banks
Type of
Loan
Islamic Process Conventional Bank Process
Car
Finance
This process of ADIB is seen to follow
Islamic financing structure which requires
the intermediaries to buy the property with
free and clear title as per Murabaha
mechanism. In case an individual applies
for an auto loan under this process, the loan
will be non-interest bearing in nature
which is considered to be free from any
riba (or excess). The bank will buy the
The important difference in the
conventional loan process is seen in
terms of the contract structure.
Murabaha is recognized as a sale
contract, the conventional loan
process on the other hand is based
on interest based lending agreement
and transaction (Majd Bakir,
2014). The conventional process of

3FINANCIAL MARKETS AND INSTITUTES
automobile from a client for a
predetermined profit over the cost item and
sells it back to the client based on
instalments. Due to this the bank charges a
set fees rather than riba or interest. The
entire process is followed in two stages. In
this case, the purchaser becomes the owner
of the commodity and becomes liable for
its full price (“Cost plus profit”). An
eligible applicant must be 21 years and
must have a minimum salary of AED 5000.
The length of the confirmed service also
needs to be at least 6 months. The
important documents needed includes “
Original and copy of valid passport (with
valid residence visa for expatriates)”,
“original and copy of valid Emirates ID”
and statement of account for the last 3
months. In addition to this, the bank offers
a repayment option of up to 60 months,
“free ADIB VISA Cashback Card for the
first year” and “20% down payment
option”. In order to apply for the
Murabaha, “murabaha letter of credit is
issued for a beneficiary on behalf of the
applicant” (Adib.ae, 2018). The bank
agrees to the issuing the letter of credit and
then agrees to the payment of the amount
which follows terms described in the letter
of credit. In case of the murabaha
agreement ADIB is discerned to sell the
banking is based on credit score,
ratio of debt to income, size of the
loan and the down payment. The
subject matter in the conventional
banking is considered with the
amount of money while the
Murabaha takes into account the
commodity aspect. The collateral is
put up before processing of the loan
for conventional loan. The
collateral in Murabaha may be
posted after purchasing of the
commodity. The cost transparency
is not a concern in case of a
conventional loan (DMV.ORG,
2018). In the conventional banking
system, the bank is considered to
sell the product for profit which
discloses both the “original cost and
the profit to the buyer.” The
“advancing loans” and credit
interest is charged on the interest as
per the pure interest based
transactions.

4FINANCIAL MARKETS AND INSTITUTES
contract (Chelhi et al., 2017).
Home
Finance
This process has discussed on benefit of
home financing through Istisna. Based on
this contract the client will ask the bank for
construction of the unit. This will be able
to meet the different types of the
specifications given by the bank to meet
the desire of the client. The client will then
pay the price in instalments. In this case the
borrower needs to provide a “Valid salary
certificate”, income verification, “Passport
copy along with valid resident visa for
expats”, Khulaset Al Kaid and Bank
Statement. The minimum salary
requirement for the applicant is identified
with AED 10,000 for UAE Nationals and
AED 15,000 for Expats. The age criteria
requirement is discerned to be 21 years.
Some of the other document required is
considered with “Verified employment,
Valid for UAE nationals & residents and
Joint applications accepted”. The bank
provides financing of up to “AED 20
million for UAE Nationals & AED 15
Million for expatriates” this process is
based on Istisna. In addition to this it
provides “Financing of up to 80% of
property value” and partial settlement of
30% outstanding annually (Adib.ae, 2018).
A conventional home loan applicant
needs to present proof of income,
identity and residence. The
borrowing limit will be based on
the individual’s income and interest
rate will be charged as per the total
amount loan borrowed. The
conventional borrowing will
include tax concessions based on IT
returns. The conventional loan will
also include the option for
instalment payment however, the
borrower does not need to produce
“Istisna letter of credit is issued for
a beneficiary on behalf of the
applicant” and Khulaset Al Kaid
(Majd Bakir, 2014).
Boat
Finance
The financing of boat is considered to be
most ideal with the application of Ijara
The boat loan needs to be approved
and signed with necessary

5FINANCIAL MARKETS AND INSTITUTES
Finance. This lease contract allows leasing
and using the asset for a specific period
after it is fully owned. The company
provides the financing option “amount up
to AED 1 million”. The eligible applicant
needs to have a minimum salary of AED
8000, 21 years old and 6 months of
confirmed service (Adib.ae, 2018).
documents for loan. In
conventional banking the applicant
is not guaranteed of the full
ownership of the asset. The
conventional banks do not allow
“cash out” refinancing, except for
non-conforming loan program. The
applicant needs to fill “Boat Loan
Application Form”. This includes
details such as “Current Income and
Current Loan Payments”. The boat
information further includes
Manufacturer, Model year and
purchase price.
Travel
Finance
The process of travel finance is considered
to be applicable with Mudarabah
mechanism. The commercial sectors will
be able to provide the provide the finance
for customers with required expertise. The
restricted Mudarabah will ensure capital
provider imposes certain conditions on the
entrepreneurs for securing the capital.
ADIB is able to provide “Finance amount
up to AED 250,000” and charging “1%
Processing Fees (Min AED 500 and Max
AED 2,500)” (Adib.ae, 2018).
The individuals have the option to
exercise the best loan policy as per
the type of travel loan applied for.
The documents required includes
Address proof, Identity proof and
Passport size photograph
(DMV.ORG, 2018).
Personal
Finance
The process of ADIB is depicted with Qard
al-hasan, which is an “interest-free loan
(fungible, marketable wealth)”. This is
considered to be extended by the borrower
based on benevolence. This is seen as a
The conventional banking process
involves interest on the amount of
loan lent by the borrower. The
documents requirement includes
“bank statements, credit card

6FINANCIAL MARKETS AND INSTITUTES
“gratuitous loan extension to needy people
for a specified period of time”. The bank
provides “First instalment payment grace
period up to 90 days”, “Two free
instalments postponements every year” and
“Takaful cover protection with competitive
rates”. The individual must have a
minimum salary of AED 8000 per month
and UAE or expatriate with a minimum
age of 21 years (Adib.ae, 2018). .
information and loans records”
(Majd Bakir, 2014).
Debt
Settlemen
t
The "Musharkah Financing" ideal as the
client will be able to request for finance by
anticipating the bank’s shares anticipated
with profits and losses of the project as per
the client. The borrower needs to present
liability certificate, bank account statement
for the last 3 months and original valid
emirates ID (Adib.ae, 2018).
Conventional banks offer debt
consolidation loans which requires
the borrower to pay the applicable
rate of interest based on amount of
loan borrowed. The document
requirement includes bank
statements, credit card information
and loans records (DMV.ORG,
2018).
Conclusion
The significant discussion of the study is able to identify the different types the products
and services offered by ADIB offered in general. In addition to this, the learnings of the
discourse have taken into consideration the import differences pertaining to the Islamic Banking
Process and Conventional Bank Process. The important characteristics in the Islamic Banking
Process has discussed on the Islamic financing structure followed by ADIB which requires the
intermediaries to buy the property with free and clear title. The entire process is explained with
the intention of borrowing a loan for automobile. The bank will buy the automobile from a client
for a predetermined profit over the cost item and sells it back to the client based on instalments.
Due to this the bank charges a set fees rather than riba or interest. The entire process is followed

7FINANCIAL MARKETS AND INSTITUTES
in two stages. In the first stage the bank purchases the commodity which the client is willing to
sell. This stage is followed by client agreeing to the payment schedule for the repurchasing of the
goods.
References
Abu Dhabi Islamic Bank Corporate Banking . (2018). Adib.ae. Retrieved 5 February 2018, from
http://www.adib.ae/en/m/Pages/corporate_banking.aspx
ADIB | ADIB Car Finance in UAE | Abu Dhabi Islamic Bank . (2018). Adib.ae. Retrieved 5
February 2018, from http://www.adib.ae/en/personal/financing/car-finance
ADIB | Telephone Banking | ADIB Services | Personal Banking . (2018). Adib.ae. Retrieved 5
February 2018, from
http://www.adib.ae/en/pages/personal_services_telephone_banking.aspx
ADIB | Wealth Management | ADIB Structured Products . (2018). Adib.ae. Retrieved 5 February
2018, from
http://www.adib.ae/en/Pages/personal_wealth_management_structured_product.aspx
Chelhi, K., El Hachloufi, M., Aboulethar, M., Eddaoui, A. and Marzak, A., 2017. Estimation of
Murabaha Margin. Journal of Applied Finance and Banking, 7(5), p.49.
DMV.ORG. (2018). Understanding Car Financing | DMV.ORG. [online] Available at:
https://www.dmv.org/how-to-guides/auto-financing.php [Accessed 5 Feb. 2018].
Majd Bakir, m. (2014). Islamic Finance | What Is the Difference Between Murabaha and
Conventional Loan?. Financialencyclopedia.net. Retrieved 5 February 2018, from
http://www.financialencyclopedia.net/islamic-finance/questions/what-is-the-difference-
between-murabaha-and-conventional-loan.html
Understanding Car Financing | DMV.ORG. (2018). DMV.ORG. Retrieved 5 February 2018,
from https://www.dmv.org/how-to-guides/auto-financing.php