Savings Account-i (Mudaraba) is a Shariah compliant product. It is opened to all Ethiopian citizen and permanent residents. This deposit product is operated by Passbook, other alternative Electronic Payment systems.
Under the concept of Mudaraba. Under the Mudaraba contract, the customer (Rabb-ul-mal) provides the deposit and the Micro finance(“Mudarib) provides its expertise and skill in relation to the investment of such funds. Profit, if any, is shared between the parties according to pre agreed ratio, while loss, if any, is borne solely by the Mudaraba investor as the case may be. Customers are allowed to withdraw deposits without any restriction on demand. The Bank can use deposit funds from these accounts to finance any businesses permissible under the Sharia.
Ø Eligibility
Mudaraba based Savings can be opened to Individuals and other legal persons recognized by law, as well as minors through parents and tutor, and interdicted persons through legal guardians. It can be opened with zero balances with a commitment to bring its balance to Birr 25 Within a month.
Individuals:
· Renewed valid ID card
· Two recently taken Pass-port-size photographs
· Renewed trade license, Tax Identification Number (TIN), and principal registration [for accounts in the name of sole proprietorship]
Legal persons:
· Renewed trade license & Principal Registration
· Registered & attested Article & Memorandum of Association
· Written application mentioning the names of signatories
· Renewed valid ID card, and two recently taken passport-sized photograph of signatories
· Tax Identification Number
NB: For children below eighteen (18) years old (minors), the account must be opened and operated in the name of the parent or legal guardian upon providing the Birth Certificate/and or court ruling
Ø Features
· Customers save money for indefinite period of time
· The minimum balance, subject to changes from time to time, to open this account is Birr 500.00, and is operated with a passbook
· Profit to be paid is determined by the performance of the Bank during profit payment period.
· The minimum profit Sharing Ratio is 33% (Micro finance) : 67% (Customer)
· Loss if any shall be borne by account holders and the Bank in proportion with their contribution in the amount financed.
· Withdrawal is allowed without any restriction.
· Customers are required to sign an agreement/contract specifically designed for this purpose.
· The Micro finance will calculate the profit based on the daily average balance of the deposit amount.
· Applicable fees, subject to periodic changes from time to time, are imposed for the following requests:
o Replacement of lost passbook
o Replacement of damaged passbook
o Account closure within six months if opening
o Standing Instructions
o Authentication of Power of Attorney
o Balance confirmation
o Statement of Accounts [per sheet
o Duplicate advice – less than 2 years per pages
o Duplicate advise – more than 2 years per page
· Other Mudaraba products available:
– Mudaraba (Savings Account-i) Women
– Mudaraba (Savings Account-i)Youth
– Mudaraba (Savings Account-i)Teen Youth
– Mudaraba (Savings Account-i)Account for Minors
– Mudaraba (Savings Account-i)Education
– Mudaraba (Savings Account-i)Joint Accounts
– Mudaraba (Savings Account-i)Earmarked Accounts, and
– Mudaraba (Savings Account-i) Accounts for Interdicted persons
Ø Key Terms and Conditions
· Mudaraba Account will be deemed to be closed when a customer withdraws the whole of his/her balance over the counter, leaving a nil balance in the account.
· A minimum balance of Birr 1,000 must be maintained in the account for profit distribution purposes.
· The Micro finance reserves the right to reject any deposits derived from Sharia non-compliant activities.
· The customer is required to examine all entries in the pass book and report at once to the Bank any errors, irregularities or unauthorized withdrawals & missing entries.
· As a condition of withdrawal over the counter, the customer/representative/agent shall present personally, and provide ID together with passbook.
· The Micro finance shall issue a deposit slip to the customer when depositing cheque or cash
· The customer must ensure that receipts bear computer validation, be stamped & endorsed by authorized officer of the Micro finance before leaving the Micro finance premises
· Receipts are valid as an acknowledgement of deposit if they bear such endorsement