FAQS

What is Gold-Based Financing?

Gold-Based Financing is a Shariah-compliant consumer financing facility that allows customers to obtain financing against the pledge of their gold ornaments, while the gold remains safely secured with BankIslami until full settlement.

The facility is offered strictly for genuine and Shariah-compliant personal needs.

Is this product Shariah-compliant?

Yes. This product is fully Shariah-compliant and approved by BankIslami’s Shariah Board.

The financing is structured on Tawarruq, using Shariah-compliant Mutual Fund Units (MFUs) as the underlying asset, in line with SBP and AAOIFI guidelines.

How is this different from conventional gold loans?

• No interest (Riba) is charged
• Financing is based on the sale and purchase of assets, not money lending
• Late payment charges are treated as charity, not Bank income

What is Tawarruq and why is it used?

Tawarruq is a Shariah-approved mechanism used to generate liquidity through:

• Purchase of a Shariah-compliant asset
• Sale of that asset on deferred payment
• Redemption of the asset for cash

This structure ensures asset-backed financing without Riba.

Can I use the financing amount for any purpose?

The facility is available for dire and genuine personal needs, including:

• Medical expenses
• Education
• Marriage-related expenses
• Paying off conventional liabilities

Any other purpose may require prior Shariah approval.

How much financing can I avail?

• Minimum: PKR 250,000
• Maximum: PKR 5,000,000
• Up to 70% of the net value of pledged gold (Bank Investment Ratio)

How is the value of my gold determined?

Your gold is valued inside the branch by BankIslami-approved goldsmiths based on:

• Net gold weight and purity only (minimum 21 karat)

Stones, alloy, wax, or other materials are excluded from valuation.

Where is my gold kept?

• Sealed in tamper-proof bags
• Stored in fireproof vaults
• Held under dual control
• Covered under Takaful for the entire financing tenure

Who can apply for Gold-Based Financing?

• Salaried individuals
• Self-employed professionals (SEPs)
• Businesspersons

Subject to:

• Minimum net disposable income of PKR 80,000
• Satisfactory credit history
• SBP and BankIslami eligibility criteria

What is the financing tenure?

You may choose a tenure between 1 year to 4 years, with monthly instalments.

What is the profit rate?

The profit rate is linked to 1-Year KIBOR plus approved spread.
The final rate is communicated through the Offer Letter.

Are there any processing or valuation charges?

Yes. Applicable charges include:

• Processing fee as per the Bank’s Schedule of Charges
• Gold valuation charges (paid at actual)
• Applicable government taxes (FED)

All charges are disclosed upfront.

Is early settlement allowed?

Yes. Early or partial settlement is allowed.

Any rebate on unearned profit:

• Is not pre-agreed
• Requires Shariah approval
• Is granted at the Bank’s discretion

What happens if I delay an instalment?

In case of late payment:

• Charity is charged instead of penalty
• Charity is credited to the Charity Fund
• Charity does not form part of the Bank’s income

Can the charity amount be waived?

Charity waiver may be considered only in genuine hardship cases, subject to Shariah approval and the Bank’s authority matrix.

What happens if I am unable to pay the financing?

If instalments remain unpaid beyond the defined period:

• The Bank may liquidate the pledged gold
• Proceeds are used to settle outstanding dues
• Any surplus is returned to the customer

What happens in case of the customer’s death?

• Financing is settled through successors or Takaful (if applicable)
• Gold is released upon settlement
• Unclaimed gold may be auctioned
• Any surplus proceeds are returned to legal heirs

Can I get my gold back before maturity?

Yes, once all outstanding dues (including charity, if any) are fully settled and the formal settlement process is completed.

Is Takaful mandatory?

• Gold ornament Takaful is mandatory
• Life Takaful is optional (subject to availability)

How can I apply?

• Visit an authorized BankIslami branch
• Call Phone Banking: 111-ISLAMI (111-475-264)
• Email: [email protected]