Maybank Singapore launches Islamic auto finance

It’s another industry first.

Maybank Singapore Islamic Banking launched a new Shariah-compliant banking product for the financing of auto vehicles. Islamic Auto Finance or AF-i is based on the Shariah concept Al-Ijarah Thumma Al Bai’ (AITAB).

AITAB is a leasing contract (Ijarah) followed by sale contract (Bai’). Under the leasing contract, the customer leases the vehicle from the bank at an agreed rental amount over a specific period.

Upon expiry of the leasing period, the customer then enters into a sale contract to purchase the vehicle from the Bank at an agreed price.

Similar to a conventional car loan, AF-i is available for the purchase of new or used vehicles for personal use and the financing amount is dependent on the Open Market Valuation (OMV) of the financing vehicle.

Individuals who are Singapore citizens, Singapore permanent residents and foreigners who are at least 21 years of age can apply for Islamic Auto Finance.