Muscat: Meethaq, the pioneer of Islamic banking in Oman from Bank Muscat, yesterday launched the first-of-its-kind Sharia compliant car finance product in the Sultanate based on the Islamic financing mode of Murabaha.
Sulaiman Al Harthy, Group General Manager (Islamic Banking), said: "Meethaq is proud to launch the innovative car finance as part of its focus to take the lead in offering a suite of banking products, which combine traditional values with modernity. Meethaq has adopted the best practices in Islamic banking and finance worldwide to combine a robust model which will protect customers and complement the Islamic banking industry.
"The Meethaq strategy is to attract customers through innovative Shari'a based products and services. The operations are managed by an experienced team, separate from conventional banking." The benefits of Meethaq car finance include financing up to 80 per cent of the car value and repayment tenure up to eight years. The bank does not charge any processing fee and offers competitive pricing. With minimal documentation and fast processing, the car finance also offers free Takaful life coverage for customers. Meethaq car finance is available for Omanis and expatriates holding valid resident card and a minimum monthly income of OMR250.
Meethaq car finance is based on Murabaha, a form of financing done on the basis of sale. Meethaq, instead of giving a loan, purchases the car as per customer's description and sells it to him at a cost plus agreed profit.
Under Meethaq car finance, the subject matter of the contract is the car and the deferred installments, and not money against money. The bank buys the car according to the customer's specification and sells the same to the customer against deferred repayments by concluding a Murabaha sale contract.