ABC introduces first Islamic credit card
First Islamic Credit Card company is to be established by Bahrain based Arab Banking Corporation's Islamic Bank (E.C.)
ABC Islamic Bank (E.C.) has unveiled plans to launch the first Islamic Credit Card company. Two types of shares are available, the authorised capital of Management Shares (Class A) which is US$5,000,000 and Participation Shares (Class B) of US$3,000,000.
Mohamed BuQais, deputy general of ABC Islamic Bank, stated that major Islamic banks and financial institutions will be invited to participate in Class B shares, allowing them to issue credit cards to their customers. Talks are also underway with international credit card organisations to attain the necessary membership.
“This card is considered the first Islamic credit card that conforms with Sharia principles and is expected to be well accepted by all customers who prefer to utilize a credit card based on Glorious Sharia principles,” said BuQais. “Such cards will provide benefits similar to normal credit cards in terms of settlement and international recognition.”
ABC’s Islamic products include: Morabaha (Credit Sale), Mudaraba (Trust financing), Musharaka (profit sharing), Bai-Al-Salam (sale with future delivery), Al-Qard-Al-Hassan (benevolent loan), Ijara (leasing) and Istisna'a (pre-manufacturing finance).
The establishment of the Islamic Credit Card Company is yet another development in the concept of Islamic Finance. As the concept gained momentum in the past 30 years the Islamic money market and range of products and services have become more sophisticated. Currently, industry analysts estimate $160 billion in assets are under management. The scale of Islamic finance and banking has attracted not only regional players but non-Islamic banks as well.