Citibank Bhd expects to grow its Islamic banking business by 20% in terms of assets over the next two to three years through the introduction of more innovative, cutting edge Islamic banking products and services.
“We are committed and we see potential that our Islamic business can grow 20% year-on-year in the next two to three years,” its newly-appointed country business manager Michellina Triwardhany said here yesterday.
She was speaking at the launch of its syariah-compliant Guard Savings Account-i (GSA-i), the first Islamic savings account based on the ‘wakalah’ concept that combines returns on savings and takaful coverage.
“It (GSA-i) will have high appeal to both Muslims and non-Muslims because it is a superior product compared to what’s available in the market,” Triwardhany said.
Citibank’s head of wealth management products Aisyah Lam said the GSA-i provided critical illness takaful coverage (allowing account holders to be covered up to RM100,000 depending on the average monthly balance), as well as death and total permanent disability coverage of up to RM150,000.
She said the GSA-i had been designed to support customers’ savings goals (by investing in syariah-compliant activities) and provide takaful protection as well as lifestyle benefits, with a minimum initial deposit of RM2,000.
Aisyah said Citibank would pay a minimum return of 50 basis points or 0.5% on the balances in the GSA-i account and account holders would be rewarded with “hibah” in the form of lifestyle gifts twice yearly, depending on the average account balance over a six-month period.
On the expected growth of this new Islamic savings account, Aisyah said Citibank was targeting over 10,000 accounts by the next two years.
She said there was opportunity for Citibank to introduce this new Islamic product to other Asean countries in view of Malaysia’s position as a regional Islamic hub.
Citibank’s head of Islamic banking in Asia Rafe Haneef said unlike the “wadiah” principle, the wakalah concept facilitated the bank (wakeel) to define benefits that the customer (muwakkil) would obtain in the form of certain minimum returns, lifestyle gifts and takaful coverage.
He said the wakalah concept allowed the bank to act on behalf of the customers to manage and invest the deposits in syariah-compliant transactions that gave anticipated minimum returns as agreed between both parties.
He said Citibank was able to apply the wakalah principle in both the money market (introduced in United Arab Emirates and Bahrain two to three months ago) and the Malaysian retail market, thus bringing Malaysia closer to the Middle East banking community.
“We will launch and test our new product in Malaysia first, and then migrate its successes into the Middle East and other Asean countries,” he said.