General Terms and Conditions for Accounts

1.  Introduction

1.1.    These terms and conditions set out in this document shall apply to the following accounts opened and maintained with Dhofar Islamic, an Islamic Banking Window of Bank Dhofar SAOG (the “Bank”) by the Customer: 

1.1.1.    Business Account;
1.1.2.    Wakalah Deposit with Advance Profit Account;
1.1.3.    Ameen Investment Account;
1.1.4.    Ameen Term Deposit;
1.1.5.    Mudaraba Savings Account, Current Account, Fixed Deposit and High-Yield Saving Accounts; 

(Singly the “Account” and collectively the “Accounts”).
The Customer should keep a copy of this document in a safe place for future reference. However, further copies of this document are available on request. If any further information is needed, please contact the Bank on 24775777.

1.2.    The Bank may, to such extent permitted by law, amend, add to, or delete any provision of these Terms and Conditions, facilities, services or the charges that apply to the Accounts at any time without the need for the consent of the Customer. The Bank shall notify the Customer of such changes by any means of notification used by the Bank. The Customer shall be deemed to have accepted such changes if the Bank does not receive any notice to the contrary from the Customer within 20 days from the issuance of the notice of change.

 

2.  Shariah Compliance 

2.1.    The Terms and Conditions have been prepared in line with the Shariah standards of the Accounting and Auditing Organization for Islamic Financial Institutions and the rulings and guidance given by the Bank’s Shariah Supervisory Board. Both the Bank and the Customer agree to be bound by the Bank’s Shariah Supervisory Board’s interpretation of the applicable Shariah rules in relation to these Terms and Conditions and the Accounts.

2.2.    The Customer and the Bank recognize and agree that the principle of the payment of interest is repugnant to Shariah and accordingly, to the extent that any legal system would impose any obligation to pay interest, the Bank and the Customer hereby irrevocably and unconditionally expressly waive and reject any entitlement to recover interest from each other.

 

3.  Definitions and Interpretation

3.1.    The following terms, whenever used herein, shall have the meanings hereby assigned to them, unless the context expressly requires otherwise;

"Account(s)" means the Islamic account(s) opened and maintained by the Customer with the Bank and where the context requires, shall include the accounts identified in Clause 1.1. above;
“Account Opening Form or Application Form” means the account opening form (whether in paper or electronic form) in the Bank’s prescribed format as is issued by the Bank from time to time and signed or otherwise confirmed or accepted by the Customer in relation to opening of an Account.
“Advance Provisional Profit” means advance profit on the Investment Amount, of upto one year calculated on the basis of Expected Profit Rate and payable to the Muwakkil at the time of opening of the Wakala Deposit Account and at the start of every year for Investment having maturity exceeding one year; 
“Ameen Investment Account” means the account intended to be opened subject to these Terms and Conditions;
“Ameen Term Deposit” means the account intended to be opened subject to these Terms and Conditions;
“ATM” means an automated teller machine, cash handling machine, cash and cheque deposit machines or any Card operated machine or device whether belonging to the Bank or other participating banks or financial institutions nominated from time to time by the Bank, which accepts and/or dispenses cash and cheques in addition to other banking services.
“Authorized Person” means a person authorized by the Customer (whether in the account opening form or otherwise) to act on behalf of the customer in relation to the Account(s) and any transactions in relation to such Account(s).
“Average Monthly Balance” means the average monthly balance, which is computed as the aggregate of all end of day account balances from the beginning of each month to the end of that month (including the days when the account was not opened and/or when end of day balance was nil) divided by the actual number of days in that month.
“Bank” means Dhofar Islamic acting through the branch at which the Account is opened. Other branches, offices and affiliates of the Bank shall have no responsibility or liability in relation to the Account.
“Bank’s Shariah Supervisory Board” means the highest Shari’ah supervisory body for the Bank, comprising of eminent religious scholars appointed by the Bank’s general assembly of shareholders to direct and monitor the Bank’s activities to ensure they comply with the Islamic Shari’ah rules and principles;
“Business Account” means the account intended to be opened subject to these Terms and Conditions;
“Business Day” means the day (excluding Friday, Saturday and other public holidays) on which the Bank is open for business in Muscat, Oman;
“Category” means a group of Customers having same maturity classification for their Mudarabah Account or other similar account features for a given currency.
“Cardholder” means a Customer or Supplementary Nominee to whom a Card has been issued.
“Cash Withdrawal” means a cash withdrawal from an account maintained with the Bank using teller counters, ATMs, point of sale and other cash dispensing outlets made available by the Bank.
"Current Account (Qard Hassan)" means the Islamic Shariah compliant Current Account(s) opened and maintained by the customer with the Bank. The bank comes to own the deposits in the current accounts and has the right to undertake transactions in the amounts and to seek growth in them (through investment). Further, it is under an obligation to return equal amount on demand. This is the very meaning of Qard, which is the giving of wealth to one who benefits from it-that is, employs it and consumes it in pursuit of his aims. Cheque book(s) will be issued to the current account only if criteria for issuance of cheque book are met. Current Account shall not be entitled to any return, profit, or benefits in addition to actual deposit amount; 
“Clause” means a clause of these Terms and Conditions;
“Customer” means the legal or natural person in whose name the Account is opened with the Bank;
“Electronic Signature” means signing an electronic message or transaction in the form of letters or digits or symbols or signs or others and should be unique capable of determining the character of the person signed and identifying him from others.
“Expected Profit Rate” means such percentage of amount, over and above the Investment Amount, that is expected to be generated by the Bank on the Investment Amount, as agreed with the Customer from time to time;
“Fixed Deposit Account” means the Mudarabah Account which is opened by the Customer solely for the Mudarabah Term Period as shall be selected by the Customer in the Account opening form.
"Force Majeure Event" means in relation to either Party, an act of God or intervening or supervening regulation or law, provided that no act or event shall be a Force Majeure Event in relation to an affected Party unless it has taken all steps (if any) which it could reasonably be expected to have taken in order to prevent such act or event or the consequences of the same from occurring;
“Investment” means the investment of the Customer’s funds by the Bank with the expectation of generating the Expected Profit Rate, made pursuant to and as described in the Investment Documents;
“Investment Amount” means the amount mentioned in the Application Form which shall be invested by the Bank (on behalf of the Customer) or the average daily balance maintained by the Customer in the relevant Account during each month pursuant to these Terms and Conditions; 
“Investment Date” in relation to an Investment, means the date on which the Investment Amount is paid by the Muwakkil to the Wakil pursuant to these Terms and Conditions and as mentioned in the Application Form and Wakil Offer; 
“Investment Documents” means the Application Form, Wakil Offer, Muwakkil’s Acceptance and these Terms & Conditions and any other document identified by the Parties as Investment Documents
“Investment Maturity Date” means the date on which any payment of the Investment Amount is due from the Wakil to the Muwakkil as specified in the Application Form and /or Wakil Offer; 
“Investment Profit” means the actual realized profit (or loss) derived by reason of the Wakil making an Investment in accordance with the provisions of the Investment Documents;
“Investment Period” means the period from the Investment Date up to and including the Investment Maturity Date; 
“Maturity Proceeds” means the amount, in respect of the Investment, which upon maturity of the Investment, shall be due to the Muwakkil on the Investment Maturity Date and which shall comprise of the following: (a) the Investment Amount; and (b) realized Investment Profit (if any), after the deduction of all costs owing to the Wakil, Wakala Fee and Wakala Incentive (if any);
“High Yield Saving Account” means the Islamic Shariah compliant personal savings account based on the Islamic Mudaraba principle, wherein the bank (as Mudarib) will invest the Customer’s (Rabb Al Maal) money in the common investment pool on the basis of an unrestricted Mudaraba contract in accordance with the principles of Sharia. The profit distribution between the Bank (as Mudarib) and the Customer (as Rabb Al Maal) shall be as published on www.dhofarislamicbank.com, profit sharing ratio and weightages or as agreed between the Bank and the Customer from time to time.
“Mudaraba” or “Mudarabah” means a partnership in profit in which one party provides capital (“Rabb Al-Maal” or “Mudarabah Investor”) and the other party provides its expertise and skill in relation to the investment of such capital (“Mudarib” or “Mudarabah Manager”). Profit, if any, is shared between the parties as per an agreed ratio while loss, if any, is borne solely by the Mudarabah Investor provided that the loss is not due to the negligence or misconduct of the Mudarib and Mudarib will only loss his effort.
“Mudarabah Saving Account” means the Islamic Shariah compliant savings & term Account(s) opened under the Mdarabah contract and maintained by the Customer with the Bank under which the monies placed by the Customer therein shall be invested by the Bank in Islamic Shariah Compliant Assets.
“Mudarabah Term Period” means, in relation to the Fixed Deposit Account, a fixed term of one (1), three (3), six (6) or twelve (12) months or any other term as specified by the Customer in the account opening form.
“Muwakil” means the Customer;
“Muwakil Acceptance” means a communication to be sent by the Muwakil to the Wakil accepting the Wakala Offer provided by the Wakil; 
“OCL” means the Royal Decree No. 55/1990 (promulgating the Oman Commercial Law (as amended from time to time);
“Oman” means the Sultanate of Oman;
“Omani Riyal” or “OMR” means the lawful currency of Oman; 
“Qard” means the transfer of ownership in fungible wealth to a person on whom it is binding to return wealth similar and equal to it;
“Schedule of Charges” means the schedule of charges announced by the Bank from time to time in respect of fees and charges. 
“Shariah Compliant Assets” means the entire pool of Shariah compliant products, assets and investments which are invested on the basis of either or any combination of the Murabaha, Ijarah, Musharakah, Istisna or any other Shariah compliant modes of financing as approved by the Bank’s Shariah Supervisory Board.
“Supplementary Form” means any document specifying the terms of the Wakala agreed between the Customer and the Bank in the form and substance acceptable to the Bank;
“Terms and Conditions” means the terms and condition herein contained, as varied, amended, supplemented or modified from time to time.
“Wakala” means an agency contract under the terms of which one party (the “Muwakkil”) appoints the other party (the “Wakil”) as his agent to invest the Muwakkil’s funds in Shariah compliant investments. The Muwakkil will be entitled to receive any profit generated while the Wakil will be entitled to the Wakala Fee, which shall be deducted from the deposited funds. the Wakil may be entitled to an incentive also. Losses, if any, are borne solely by the Muwakkil, unless such losses are due to the negligence or misconduct of the Wakil. In the context of the Wakala based account Bank will be Wakil and customer will be Muwakkil.
“Wakala Deposit” means any Investment by the Muwakkil (customer) with the Wakil (bank) pursuant these terms and conditions;
“Wakala Deposit Account” means any wakala deposit account of the Muwakkil operated pursuant to these terms and conditions;
“Wakalah Deposit with Advance Profit Account” means the account intended to be opened subject to these terms and conditions;
“Wakala Fee” means the fee payable by the Customer to the Bank in return for the Bank’s services as agent as announced by the Bank from time to time;
“Wakala Incentive” means any amount that exceeds the Expected Profit Rate as agreed between the Muwakil and the Wakil in the Investment Documents;
“Wakil” means the Bank;
“Wakil Offer” means a communication to be sent by the Wakil to the Muwakil which includes deposit details.
“Wakala Transaction” means wakala transaction made in accordance with these Terms and Conditions under which the Wakil shall place the Muwakkil’s Investment Amount in the Sharia compliant wakala transactions;

 

4.  Opening, Operating and Closing the Accounts

4.1.    The Customer hereby agrees to open and maintain Account(s) with the Bank in accordance with these terms and conditions.

4.2.    In the event of the customer withdraws funds via cheques, the bank shall clear the cheque only in case the Account’s available balance suffices and in accordance with these Terms & Conditions.

4.3.    The Customer may open an Account with the Bank in Omani Riyal or in a range of other currencies recognized by the Central Bank of Oman and offered by the Bank. Please ask a member of our staff for details of the currencies in which the Bank operates.

4.4.    The Customer should maintain credit balance in the Account to be able to remain the Account operative. However, rules governing dormancy of the account will be applied as per the applicable regulatory guidelines prevailing from time to time. 

4.5.    The Bank, in its sole discretion, reserves the right to decline opening the Account without being under the obligation to explain its reasons for such refusal.

4.6.    The Customer may, at any time in accordance with these Terms & Conditions deposit any amount to the credit of the Account using the means of deposit currently available or which may be introduced in the future. The Customer agrees that any balance available in the Account may be consolidated and aggregated with the Bank’s general pool of investments and with other amounts received by the Bank from other customers.

4.7.    The Bank will treat cash paid into the Account as received on the same day that it is paid in through one of the Bank’s branches.

4.8.    Any cheques deposited or funds transferred to the Account will not be made available to the Customer until the relevant amount is actually cleared and collected. In accepting items for deposit, the Bank acts as the Customer’s collecting agent and assumes no responsibility for realization of the funds.

4.9.    The Bank shall be entitled, in its sole discretion, to refuse any instrument or deposit and/or limit the amount permitted to be deposited and/or return any deposit or any part thereof at any time and from time to time.

4.10.    The Bank may, without prior notice to and/or consent of the Customer, reverse any entries in the Account where 

(i)    transfers, remittances, cheques or other instruments previously credited to the Account are recalled or returned unpaid for any reason. The Bank shall be entitled to retain unpaid cheques or instruments and to exercise all rights in relation thereto; or
(ii)    such entry is made in error and the Bank accepts no responsibility for, or liability in respect of, any loss or damage arising out of or relating to such operating errors. In the event the Customer discovers any such error, the Customer shall immediately notify the Bank in writing of such error. Any amendment or correction in the Account records made by the Bank is considered effective and valid.

4.11.    The Customer may, at any time, withdraw any amount from the Account, subject to maintaining the minimum balance referred to in these Terms & Conditions. However, withdrawals of large amounts may take up to two Business Days to be processed.,

4.12.    Notwithstanding the provisions of Article 345 of OCL, it is hereby agreed that deposit in or withdrawal from any Account may be made at any branch of the Bank in Oman subject to production of satisfactory evidence of the Customer’s identity and the necessary details of such Account. All such deposits shall be credited to the Account at the branch where it is held.

4.13.    Notwithstanding the Customer’s right to withdraw from the Account, the Bank shall not be liable for its inability to pay any amounts from any of its branches due to restrictions on convertibility or transferability, requisitions, involuntary transfers, acts of war or civil strife or other similar causes beyond the Bank’s control. In such event no office, branch, subsidiary or affiliate of the Bank shall be responsible or liable to the Customer.

4.14.    The Bank shall not be responsible or liable for any act or omission of other banks or third parties (including any other member of the Dhofar Islamic or Bank Dhofar) in any transaction and, in particular, shall not be liable for any delays, losses, charges or expenses, which the Customer may incur. The Customer further acknowledges that it may not receive the full value of a draft, cheque or telegraphic transfer as a result of the deduction of any applicable fee, charges or other restrictions.

4.15.    The Bank has the right to freeze or suspend the Account and to refuse any and all deposits or withdrawals if any instructions given to the Bank are ambiguous, conflicting or not acceptable to the Bank or if the Bank requires any further instructions, information or documentation. 

4.16.    The Customer agrees that, notwithstanding the provision of Article 346 of OCL, all accounts of the Customer with the Bank at any of its branches shall be treated as a single combined account.

4.17.    Term & Condition regarding beneficial ownership of the account
It is hereby solemnly declared and confirmed that I / we are actual and beneficial owner (s) of the account being opened with Dhofar Islamic and the account is not being opened for any third party. This is correct and factual information. In case Dhofar Islamic has any reason to believe that the disclosed information is incorrect and incomplete, the Bank reserves the right to take suitable action against me / us, close the account and may appropriately report to the relevant government authority (ies).

4.18.    The Bank may close the Account by giving the Customer at least 60 days’ notice in writing. However, the Bank may close the Account immediately without notice at any time if:

i.    the Customer violates any of the Central Bank of Oman regulations. 
ii.    the Customer breaches any of these Terms & Conditions; 
iii.    the Bank believes that the Account is being used for an illegal or fraudulent purpose ; 
iv.    the Bank suspects that the Customer has given the Bank false information; 
v.    the Customer fails to provide any documents or information requested by the Bank;
vi.    the Customer behaves in a threatening or violent manner towards the staff; or
vii.    for any other reason that the Bank sees appropriate in its absolute discretion.

 

5.  Wakala Accounts

5.1.   Appointment of Wakil, Wakala Fee and Wakala Incentive and Wakala terms 

5.1.1.    The Wakil is hereby appointed by the Muwakkil to be the Wakil and attorney in fact of the Muwakkil to do all acts in its capacity as Wakil unless otherwise indicated with respect to the Investments of Muwakkil’s funds in Islamic Sharia compliant transactions. The Bank may commingle its shareholders' equity or any portion thereof or any other funds invested on their behalf with the Mudarabah Funds.

5.1.2.    The Wakil shall be acting as the Wakil for the Muwakkil with respect to executing Investment contemplated herein only on a limited basis in accordance with these Terms and Conditions. Except as expressly provided for in these Conditions or where required by law, the Wakil shall not have any authority to represent or bind the Muwakkil, or purport to do so. 

5.1.3.    The Wakil undertakes to transfer the Maturity Proceeds upon on the Investment Maturity Date to the account of the Muwakkil as notified by the Muwakkil in the Application Form and the Muwakkil Acceptance.

5.1.4.    The Wakil agrees with the Muwakkil that it shall in performing its obligations as the Wakil and in accordance with these Terms and Conditions, look after the interests of the Muwakkil and act dutifully and in good faith and shall administer the Investment with the same degree of care as it would exercise as if such Investment had been made and administered on its own account and not on behalf of the Muwakkil. The Wakil shall be liable to the Muwakkil if it acts in bad faith or with reckless indifference to the Muwakkil’s interests and shall hold harmless and indemnify the Muwakkil on a full and unqualified basis in respect of all actual costs and expenses suffered or incurred by the Muwakkil as a consequence of the Wakil’s failure to comply with any of the provisions contained in these Terms and Conditions.  

5.1.5.    In relation to the Investment, the Muwakkil shall bear all the risks associated with the acts of the Wakil except those risks resulting from the Wakil’s gross negligence, willful misconduct, breach or fraud. 

5.1.6.    In consideration of the Wakil acting as Wakil and attorney of the Muwakkil, the Wakil shall be entitled to deduct from the Investment Amount, if required, all actual costs, liabilities and expenses incurred by the Wakil in relation to the Investment, together with the Wakala Fee, for so acting under the Investment Documents.

5.1.7.    The Wakil shall be entitled to Wakala Fee and Wakala Incentive as agreed between the Parties.

5.1.8.    Wakala Transactions shall be carried out for and on behalf of the Muwakil but in the name of the Wakil or in the name of such agent as the Wakil selects.

5.1.9.    The Wakil may appoint an agent to discharge any of its duties under these Terms and Conditions.

5.1.10.    The Parties agree that the Wakil may aggregate the Investment Amount with the Wakil’s pool of investments and with other amounts received by the Wakil pursuant to transactions entered into with other counterparties from time to time.

5.1.11.    The Wakala investment term shall be renewed to equal periods upon Maturity Date at the Wakil’s prevailing anticipated rate, unless either party provides notice to the contrary.

5.2.   Terms and Conditions for Business Account

5.2.1.    The Customer hereby agrees to open the Business Account linked to a special current account with the Bank in accordance with these terms and conditions.

5.2.2.    The Customer appoints the Bank as its agent to invest all the funds available in the Account / Special Current Account (defined below) from time to time and the Customer hereby authorises the Bank to enter into any Shariah-compliant transactions to enable the Bank to fulfil its obligations under these Terms & Conditions.

5.2.3.    Private institutions and high net worth individuals Customers should deposit and maintain, at all times, a minimum balance of OMR 10,000 (or its equivalent in other currencies) to be eligible for this Account.

5.2.4.    By opening the Account, a current account linked to Account will be opened providing the Customer with sweep functionality (“Special Current Account”). Whenever money is deposited in the Special Current Account, the Bank will sweep the funds into Business Account over and above OMR 10,000 and subsequently into the common pool of investment, where the customer may earn profit. This means that the balance in the Special Current Account will always be OMR 10,000.

5.2.5.    The Customer authorizes the Bank to transfer the amounts deposited in the Special Current Account over and above the minimum balance to Business Account once being deposited therein. The Customer further authorizes the Bank to invest those amounts in accordance with the Wakalah terms and conditions.

5.2.6.    The Special Current Account also provides customers with cheque book containing certain number of leaves. The customer will be issued one cheque book per year if required by the Customer. Additional cheque books may be issued at the Bank’s discretion upon the Customer’s written request. In the event of account closure the customer must return all unused cheque leaves.

5.2.7.    The Customer may, at any time, withdraw any amount from the Business Account. Withdrawals shall be carried out through the designated cheque book only where the cheque can be issued in the name of the Customer or any other payee the Customer may wish to pay.

5.2.8.    Whenever a cheque is presented for collection, the Bank will sweep the money from Business Account to the Special Current Account to meet the obligation of clearing the cheque according to the cheque books terms specified in these Terms & Conditions and subject to having sufficient balance in Business Account to meet such obligation. There shall be no overdraft facility on the Account.

5.2.9.    The Customer appoints the Bank as its agent to invest all the funds available in the Account from time to time and the Customer hereby authorises the Bank to enter into any Shariah-compliant transactions to enable the Bank to fulfil its obligations under these Terms & Conditions.

5.2.10.    The Bank hereby agrees with the Customer that it shall, in performing its obligations under these Terms & Conditions, look after the interests of the Customer and act dutifully and in good faith and shall not enter into any investment that, in the reasonable judgment of the Bank, might return a lower profit than the Expected Profit Rate and shall administer the investments with the same degree of care as it exercises with regard to similar investments which it would administer on its own account.

5.2.11.    The Expected Profit Rate and the Wakala Fee applicable to each Customer shall be specified at the time of opening the Account. The Expected Profit Rate and the Wakala Fee may be amended from time to time by mutual agreement between the Bank and the Customer. 

5.2.12.    The Bank shall be entitled to the Wakalah Fee and Wakalah Incentives as agreed between the Parties.

5.2.13.    The actual rate of return generated from investing the funds available in the Account (the “Actual Profit Rate”) shall be calculated at the end of each month and the amount of profit payable to the Customer shall be subject to the following:

(i)    if the Actual Profit Rate was equal to, or more than, the Expected Profit Rate, the Bank shall pay to the Customer the profit capped at the Expected Profit Rate, while the Bank shall be entitled to any profit amount exceeding the Expected Profit Rate as an incentive for good performance;
(ii)    if the Actual Profit Rate was less than the Expected Profit Rate, the Bank shall pay to the Customer the amount of profit actually generated;
(iii)    if no profit was generated, the Customer will not be entitled to receive any profit;
(iv)    if losses were incurred (unless caused by the gross negligence or wilful default of the Bank), the Customer shall bear its share of the losses in accordance with the Investment Amount’s proportion to the total amounts invested in the Bank’s pool of investments; and
(v)    the Customer’s profit shall be credited to the Account on a monthly basis unless otherwise agreed with the Customer.

5.2.14.    The Bank confirms that it has the system and the means to constantly monitor the performance and the profitability of the investments and shall inform the Customer if the performance and/or the profitability of its investments are declining or if the Expected Profit Rate might no longer be achievable.

5.2.15.    Upon the Bank informing the Customer that the Expected Profit Rate might no longer be achievable, the Customer will have the option of accepting a lower expected rate or requesting the termination of the Account where the Customer shall become entitled to receive any balance available in the Account and any profit accrued up to the closure day.

5.3.   Terms and Conditions for Wakalah Deposit with Advance Profit

5.3.1.    Muwakkil shall pay the Investment Amount on or before the Investment Date to the account designated by the Wakil

5.3.2.    Muwakkil shall be absolutely and irrevocably obliged to pay the Investment Amount payable by the Muwakkil under the Investment Documents, unless and to the extent prohibited from making any such payment by reason of application of any Applicable Law or any Force Majeure Event.

5.3.3.    Wakil will pay the Advance Provisional Profit to the Customer from the Wakil’s pool of funds for the first year of the Investment in the Wakala Deposit at the time of creation of Wakala Deposit and for each subsequent year until the Investment Maturity Date at each one-year anniversary of such Wakala Deposit. Actual profit on the Investment will be calculated on the Investment Maturity Date and if, there is any profit exceeding the Expected Profit Rate then the same will be retained by the Wakil as Wakala Incentive as agreed in the Investment Documents.  

5.3.4.    The Muwakkil hereby acknowledges that the Investment Profit from the Investment may be lower than the Expected Profit Rate and or be no profit at all.  

5.3.5.    In case, the Investment Profit is lower than the Expected Profit Rate, the Muwakkil will be paid whatever profit is made on the Investment along with the Investment Amount after deduction of the Advance Provisional Profit paid by the Wakil to the Muwakkil at the time of placement of deposit in the Wakala Deposit Account. For avoidance of doubt, it is clarified that the Wakil shall not be entitled to the Wakala Incentive, in case the Expected Profit Rate is not achieved by the Wakil on the Investment. Provided further that in case the Investment Period of the Wakala Deposit Account is continuing and the Wakil has failed to achieve the Expected Profit Rate in any particular year, then the Wakil may at its discretion decide to invest the entire Investment Amount for another year without any deductions on account of difference in the Expected Profit Rate and the paid Advance Provisional Profit (“Difference Amount”) subject to deduction of such Difference Amount from the Advance Provisional Profit payable for the succeeding year of the Investment under the Wakala Deposit Account.    

5.3.6.    In case of loss on the Investment, the Muwakkil shall bear all the risk associated with the act of the Wakil for the Muwakkil except those risks resulting from gross negligence or misconduct of the Wakil. For avoidance of doubt, it is clarified that in case of loss on Investment, the Wakil shall deduct such loss from the Investment Amount or from the Advance Provisional Profit payable by the Wakil to the Muwakkil for the next year. 

5.3.7.    The duration of the Investment shall be as specified in the Application Form.

5.4.   Terms and Conditions for Ameen Investment Account    

5.4.1.    The Customer appoints the Bank as its agent to invest all the funds available in the Account from time to time and the Customer hereby authorizes the Bank to enter into any Shariah-compliant transactions to enable the Bank to fulfil its obligations under these Terms & Conditions.

5.4.2.    The Bank hereby agrees with the Customer that it shall, in performing its obligations under these Terms &  Conditions, look after the interests of the Customer and act dutifully and in good faith and shall not enter into any investment that, in the reasonable judgment of the Bank, might return a lower profit than the Expected Profit Rate and shall administer the investments with the same degree of care as it exercises with regard to similar investments which it would administer on its own account.

5.4.3.    The Expected Profit Rate and the Wakala Fee applicable to each Customer shall be specified at the time of opening the Account. The Expected Profit Rate and the Wakala Fee may be amended from time to time by mutual agreement between the Bank and the Customer 

5.4.4.    The actual rate of return generated from investing the funds available in the Account (the “Actual Profit Rate”) shall be calculated at the end of each month and the amount of profit payable to the Customer shall be subject to the following:

(i)    if the Actual Profit Rate was equal to, or more than, the Expected Profit Rate, the Bank shall pay to the Customer the profit capped at the Expected Profit Rate, while the Bank shall be entitled to any profit amount exceeding the Expected Profit Rate as an incentive for good performance;
(ii)    if the Actual Profit Rate was less than the Expected Profit Rate, the Bank shall pay to the Customer the amount of profit generated;
(iii)    if no profit was generated, the Customer will not be entitled to receive any profit;
(iv)    if losses were incurred (unless caused by the gross negligence or willful default of the Bank), the Customer shall bear its share of the losses in accordance with the Investment Amount’s proportion to the total amounts invested in the Bank’s pool of investments.

5.4.5.    The Customer’s profit shall be credited to the Account on a monthly basis unless otherwise agreed with the Customer.

5.4.6.    The Bank confirms that it has the system and the means to constantly monitor the performance and the profitability of the investments and shall inform the Customer if the performance and/or the profitability of its investments are declining or if the Expected Profit Rate might no longer be achievable.

5.4.7.    Upon the Bank informing the Customer that the Expected Profit Rate might no longer be achievable, the Customer will have the option of accepting a lower expected rate or requesting the termination of the Account where the Customer shall become entitled to receive any balance available in the Account and any profit accrued up to the closure day.

5.5.   Terms and Conditions for Ameen Term Deposit

5.5.1.    The Muwakil hereby appoints the Wakil to be his agent (the Agent) for the investment of the Muwakil’s funds in Islamic Sharia compliant transactions. 

5.5.2.    If the Wakil breaches any of the obligations set out in the General Terms or these Terms & Conditions, it shall indemnify the Muwakkil against any actual damages sustained by the Muwakkil as a result of such breach.

5.5.3.    Investment Transactions shall be carried out for and on behalf of the Muwakil but in the name of the Wakil or in the name of such agent as the Wakil selects.

5.5.4.    The Wakil may appoint an agent to discharge any of its duties under these Terms and Conditions

5.5.5.    The Wakil shall be entitled to the Wakil Fee and Wakil Incentives

5.5.6.    The Parties agree that the Wakil may aggregate the Investment Amount with the Wakil’s pool of investments and with other amounts received by the Wakil pursuant to transactions entered into with other counterparties from time to time. 

5.5.7.    The Wakala investment term shall be renewed to equal periods upon Maturity Date at the Wakil’s prevailing anticipated rate, unless either party provides notice to the contrary.

5.6.   Implementation and performance of each Wakala transaction

5.6.1.    On any Business Day during the business hours of both parties, either party may notify the other by telephone, email or facsimile to enter into an Investment Transaction. 

5.6.2.    The Muwakkil understands that the Wakil may record telephone conversations made between the Parties in connection with any Investment Transaction and the Muwakkil consents to such recording.

5.6.3.    If the Muwakkil is willing to enter into the proposed Wakala Transaction, it shall send to the Wakil a Muwakkil Acceptance.

5.6.4.    The Muwakkil shall pay the Investment Amount to such account as the Wakil shall have notified the Muwakkil for value not later than the Investment Date.

5.6.5.    The Wakil shall arrange for the payment and collection of funds on behalf of the Muwakkil and it is hereby authorized to execute and deliver any instruments or transfers which are necessary in connection therewith.

5.6.6.    The Wakil undertakes to transfer the Maturity Proceeds on the Maturity Date to such account as the Muwakkil shall have notified the Wakil.

5.6.7.    The currency of each Investment Transaction shall be as agreed by both parties in each Wakala Transaction.

5.7.   Pre-mature withdrawal and renewal 

5.7.1.    Muwakkil may withdraw the Investment Amount with five days prior notice to the Wakil. Such a premature withdrawal, if permitted, will adversely affect the integrated weightage points allocated to the Wakala Deposit, downgrading it to a profit slab lower than that of the term during which the deposit has remained with the Bank and the profit shall be recalculated on the basis of the new integrated weightage points. Advance Provisional Profit already paid to the Muwakil in relation to that Investment Period shall be adjusted on the basis of the new points against the principal and the remaining profit, if any. 

5.7.2.    In case of pre mature withdrawal before the Investment Maturity Date, the Muwakkil shall be entitled to the adjusted profit or no profit at the discretion of the Wakil.

5.7.3.    In case of pre mature withdrawal profit will be calculated till the date of withdrawal and profit rate will be adjusted at the Wakil’s discretion or to the nearest full months / period covered for Investment.

5.7.4.    Unless instructed otherwise by the Muwakkil, 15 days before the expiry of the Investment Period, a Wakala Deposit shall be renewed automatically on the same terms and conditions (but subject to any change in profit rate as computed at the following Profit distribution date(s).

5.8.   Wakil’s liability 

5.8.1.    Wakil will only be liable for any reasonable losses, costs and expenses incurred by the Muwakkil which arise directly from any breach of contract or negligence by the Wakil in relation to the Wakala Deposit Account. 

5.8.2.    Wakil will not be liable to the Muwakkil for any consequential or indirect loss, loss of profits, loss of business, loss of goodwill or any form of special damages arising from the operation of the Account whether such liability was reasonably foreseeable or not and whether or not we have been advised of the possibility of such loss being incurred.

5.8.3.    Wakil will not be liable for any shortfall between the Expected Profit Rate as specified in Wakil Offer and the Investment Profit paid (if any).

5.8.4.    Nothing in this paragraph excludes Wakil’s liability for fraudulent misrepresentation by the Wakil, Wakil’s staff or Wakil’s liability for death or personal injury caused by Wakil’s negligence or the negligence of Wakil’s staff. 

 

6.  Mudaraba Accounts

6.1.    Mudaraba Accounts Deposits, Credits and Withdrawals 

1.1.1.    The Bank shall be entitled, in its sole discretion, to refuse any instrument or deposit and / or limit the amount permitted to be deposited and / or return any deposit or any part thereof at any time and from time to time.
1.1.2.    No deposits shall be made available to the Customer until the Bank has received cash or its equivalent at the branch where the Account is maintained. Proceeds of deposits are not available until cleared funds are received by the Bank. In accepting items for deposit, the Bank acts as the Customer’s collecting agent and assumes no responsibility for realization.
1.1.3.    The Bank may, without prior notice to and/or consent of the Customer, reverse any entries in the Account where transfers, remittances, cheques or other instruments previously credited to the Account are recalled or returned unpaid for any reason. The Bank shall be entitled to retain unpaid cheques or instruments and to exercise all rights in relation thereto, if

(i)    the Bank has exceptionally or erroneously credited the Account;
(ii)    the Customer has withdrawn funds subsequent to such credit; and 
(iii)    Subsequently, the funds are recalled or un-cleared, Clause 6.2 shall apply to any overdraft created by withdrawal of funds.

1.1.4.    The Bank shall not be responsible or liable for any act or omission of other banks or third parties (including any other member of the Dhofar Islamic or Bank Dhofar in any transaction and, in particular, shall not be liable for any delays or losses, charges or expenses which may be incurred. The Customer further acknowledges that it may not receive the full value of a draft, cheque or telegraphic transfer as a result of the deduction of any applicable fee, charges or other restrictions in respect thereof.
1.1.5.    The Bank may convert all foreign currency deposits or transfers to the Account at the Bank’s prevailing rate for such currency.
1.1.6.    In the event the Bank agrees to accept bills, cheques, drafts or instruments drawn on banks outside the Sultanate of Oman (the “Foreign Instruments”) for clearing or collection, the Customer irrevocably and unconditionally acknowledges and agrees additionally as follows:

(i)    The clearing or collection of foreign instruments is dependent upon the laws and practices of the country or state in which the drawee bank is located
(ii)    The Bank may accept foreign instruments for, clearing or collection at its absolute discretion and solely as a facility to the Customer at its request from time to time. The Bank reserves the right to refuse any Foreign Instrument at its discretion or to return any Foreign instruments at any time;
(iii)    The Bank assumes no responsibility for the realization of any Foreign Instrument deposited with it or for the value given by a foreign bank or for any mail or communication delays, loss of mail or courier, operating errors, clearing system delays or losses or for any charge, expense or loss, howsoever caused; and
(iv)    In certain countries, the clearing of cheques may be with recourse and, even when funds have been made available, the drawee bank may return the cheque or recall the funds subsequently.

1.1.7.    The Bank may, without prior notice to the Customer, reverse any entry made in error and accepts no responsibility for, or liability in respect of, any loss or damage arising out of or relating to such operating errors. In the event the Customer discovers any such error, the Customer shall immediately notify the Bank in writing of such error.
1.1.8.    Withdrawals from the Account shall be subject to such notice or restrictions as may be applicable from time to time.
1.1.9.    The Bank may, in its sole discretion, accept instructions allowing a third party to withdraw funds from the Account, but only if such instructions are in a form acceptable to the Bank and on the condition that the customer shall indemnify the Bank as herein provided or otherwise as required by the Bank.
1.1.10.    The Bank shall have the right to refuse to honor any cheque, instrument or instruction if the signature thereon or any entry, alteration or endorsement thereon is not acceptable to the Bank or if the funds in the Account are insufficient. However, if the Bank, in its sole discretion, allows an overdraft, the provisions of Clause 4 shall apply.
1.1.11.    The Bank shall have the right to freeze or suspend operation of the Account and to refuse any and all deposits, credits and withdrawals if the Customer is in breach of any of these Terms and Conditions or if any instructions given to the Bank are ambiguous, conflicting or not acceptable to the Bank; 

(i)    if the Bank suspects that there may be any legality in any transactions (including, without limitation any breach of Central Bank regulations relating to money laundering); or
(ii)    if the Bank requires any further instructions, information or documentation, in form and content satisfactory to the Bank.

1.1.12.    While the Bank acknowledges that the funds deposited on Qard Hassan basis which are known as deposits on demand are at the disposal of the Customer, the Bank may, at its sole discretion, use the funds in a Shariah compliant manner in accordance with the guidelines/advice issued by the Bank’s Shariah Supervisory Board. Furthermore, the Customer, acknowledges, agrees and understands that the Customer has no right to demand any profits generated through the funds under any of such Accounts mentioned in this clause, unless agreed otherwise with the Bank.
1.1.13.    Notwithstanding the provisions of Article 345 of Oman Commercial Law, Royal Decree 55/90 (OCL), it is hereby agreed that deposit in or withdrawal from any Account may be made at any branch of the Bank in the Sultanate of Oman subject to production of satisfactory evidence of the Customer’s identity and the necessary details of such Account. All such deposits shall be credited to the Account at the branch where it is held.
1.1.14.    It is agreed that notwithstanding the provision of Article 346 of OCL, all Accounts of the Customer with the Bank at any of its branches shall be treated as a single combined account.

1.2.    Overdrafts and Minimum Balances 

1.2.1.    Account(s) may not be overdrawn without the prior consent of the Bank. In the event that an Account is overdrawn, the Customer waives any right to immediate notice of overdrawing in terms of Article 341 of OCL, and all amounts overdrawn will be immediately repayable upon demand by the Bank. At the request of the Customer, the Bank may at its sole discretion provide an overdraft facility to the Customer under the Islamic mode of Qard Hassan from Bank to customer. In the event that an Account is in overdraft at any time without such authorization, the Customer shall immediately deposit into such Account sufficient funds to bring the Account into a credit balance and the bank will not charge any extra amount or take fee in this case.
1.3.    Current / Qard Accounts 
1.3.1.    The Bank shall be irrevocably authorized to honor and debit to the Current Account all cheques and instruments drawn by the Customer on the Current Account.
1.3.2.    The Customer hereby agrees and undertakes:
(i)    to protect the Cheque book(s) issued by the Bank, and the Customer hereby irrevocably agrees that it assumes full and absolute responsibility and liability in respect of the issuance and use of any cheques and shall be responsible in all cases arising out of theft of the Cheque book or the misuse thereof or of any of the cheques contained therein, including forgery, regardless of whether the aforementioned misuse was committed by any employee(s) of the Customer or by any other person, and the Customer shall sustain all the consequences of the default and indemnify and hold the Bank harmless in all respect;
(ii)    to use only the cheques supplied by the Bank;
(iii)    To indemnify the Bank in respect of the Bank’s acceptance of any stop payment order.
1.3.3.    The Bank may at its discretion and without assigning any reason, and without incurring any liability whatsoever for doing so, refuse to honor any cheques, draft or written instructions signed by the Customer. If the Bank, however, does honor and pay such cheque, draft or written instruction, the Customer shall assume full responsibility and liability in respect thereof.
1.4.    Mudarabah Savings Accounts
1.4.1.    The Customer may, at any time in accordance with these Terms and Conditions, place funds (the “Mudarabah Funds”) to the credit of a Mudarabah Account, which shall be managed and invested on a Mudarabah basis by the Bank in Islamic Shariah Compliant Assets (the “Mudarabah Assets”). Funds from different categories of depositors will be combined for investment in Mudarabah Assets. Customer from different categories of depositors will have joint participation in respective Mudarabah Assets. The Bank may commingle its shareholders' equity or any portion thereof or any other funds invested on their behalf with the Mudarabah Funds.
1.4.2.    The profits from the Mudarabah as per the pre-agreed share of Mudarib and Rabb-al-Maal (the “Mudarabah Profits”) shall be allocated between the Bank and the Customer at the end of the period for which Mudarabah Profits are being calculated (the “Profit Allocation Period”), as follows:
(i)    Deposit of each Category of Accounts invested in the Mudarabah Assets will be calculated based on the weightages (the “Profit Weightages”) determined by the Bank from time to time in respect of each Category of Accounts at the commencement of each Profit Allocation Period and the average balance maintained by the Customer in its Mudarabah Account during the Profit Allocation Period calculated on a daily product basis.
(ii)    Based on the fact that the bank as (Mudarib) the Bank shall be entitled to a pre-determined proportion of the Mudarabah Profits (if any) (the “Manager’s Profit Share”);
(iii)    the remaining Mudarabah Profit, after deduction of the Manager’s Profit Share (the “Profit Amount”), shall be allocated amongst the Customers at the end of each Profit Allocation Period by reference to the Profit Weightages determined by the Bank in respect of each Category of Accounts at the commencement of each Profit Allocation Period and the average balance maintained by the Customer in its Mudarabah Account during the Profit Allocation Period calculated on a daily product basis. The Customer’s share of the profit will be determined in accordance with the per annum rate (the “Profit Rate”) applicable to the relevant Category to which the Customer belongs.
(iv)    The Manager’s Profit Share and the Profit Weightages applicable to each Category shall be determined by the Bank from time to time at the beginning of each period and with the consent of the client.
(v)    The updated and prevailing Manager’s Profit Share and Profit Weightages applicable to each Category will be available at the Bank’s website, displayed in the Bank’s branches, may be obtained from the Bank from time to time and/or shall be communicated to the Customer in any other mode, whether electronic or otherwise, in accordance with the Bank’s prevailing practices. The Bank reserves the right to vary the Manager’s Profit Share and/or the Profit Weightage from time to time in accordance with the prevailing regulations and/or directives applicable to it, such variation shall be deemed to be effective upon the commencement of the Profit Allocation Period immediately succeeding such variation. Subject to the approval of the customer, Customer shall deemed to have accepted such variation if the Bank does not receive any notice to the contrary within 7 days from the issuance of such notice unless the customer proves of non-receipt.
(vi)    The Profit Amount payable by the Bank to the Customer shall be paid to the Customer in accordance with the terms agreed in the account opening form or as otherwise advised by the Bank from time to time.
1.4.3.    The Customer may withdraw the Mudarabah Funds from the Mudarabah Term Account prior to expiry of the applicable Mudarabah Term Period, subject to the following conditions:
(i)    the Customer shall give seven days advance written notice of such withdrawal to the Bank;
(ii)    only the whole (and not part of) the Mudarabah Funds may be withdrawn;
(iii)    if the date on which the withdrawal is effected (the “Withdrawal Date”) occurs within thirty days from the date the Mudarabah Funds were deposited in the Mudarabah Term Account (the “Deposit Date”), the Customer shall not claim any profit for the relevant Profit Allocation Period; and
(iv)    in all other cases, the Customer shall be entitled to profit calculated by reference to the relevant Profit Rate applicable to the last completed Mudarabah Term Period preceding the Withdrawal Date (“Revised Profit Rate”). Such Revised Profit Rate shall be applied to each completed month elapsed from the Deposit Date up to the Withdrawal Date.
1.4.4.    The Customer acknowledges that nothing in these Terms and Conditions shall be construed as being a warranty or a representation by the Bank of any guaranteed profits, or any capital guarantee of any part or the entire portion, in respect of the Mudarabah Funds. The Customer is aware that all deposits in the Mudarabah Account (including the original Mudarabah Funds) are exposed to potential losses arising out of a loss incurred in respect of a Mudarabah Assets and that such losses may even affect the principal amount of the funds deposited by the Customers in the Mudarabah Account.
1.4.5.    Any losses incurred on the Mudarabah Funds during a Profit Allocation Period shall be borne solely by the Customer. If, however, the Bank has also invested a certain sum in the Mudarabah Assets then such lossesshall be shared between the Customer and the Bank proportionately in accordance with the respective amounts invested by the Customer and the Bank in the Mudarabah Assets. In the event that such losses occur during a Profit Allocation Period, the Bank shall not be entitled to the Mudarib’s (Manager’s(Profit Share in respect of the relevant Profit Allocation Period.  
1.4.6.    Bank as "Mudarib" reserves the right to deduct as Profit Equalization Reserve (PER), if required, a certain percentage out of the Mudarabah income, before allocating the Mudarib Share, in order to maintain a certain level of return on investment for Mudarabah account holders
1.4.7.    Bank as "Mudarib" reserves the right to deduct as Investment Risk Reserve (IIR), if required, a certain percentage out of the income of investment account holders, after allocating the Mudarib Share, in order to cater against future losses for Mudarabah account holders
1.4.8.    In case of Mudarabah Accounts (except the Fixed Deposit Accounts) customers have the right to withdraw the full amount of Mudarabah and, In case of Fixed Deposit Accounts, the withdrawal Mudarabah amount will be as per clause 6.4.3.  
1.4.9.    As per terms of Mudaraba, any loss shall be borne by the Customer only, unless the loss is the result of negligence or misconduct on part of the Bank or due to the Bank’s violation of the terms and conditions as agreed between the Bank and the Customer.