Islamic insurance
ABSA aquired Takafol Motor, Household and Business Insurance
Insurance Coverage
Offering comprehensive, reliable and Shari'ah compliant insurance cover for your vehicle, household and business, Takafol Motor, Household and Business Insurance also includes a range of useful additional benefits and assistance programmes.
Absa’s Takafol cover offers specifically developed products that are tailor-made to suit the needs of both individuals and business.
Personal Takafol covers your private residences, contents, portable electronic equipment, and your private motor vehicles.
Commercial Takafol provides cover for all your valuable business assets, equipment, buildings and commercial motor vehicles.
Takafol also provides Mosque Building cover, which covers your local mosque against any damage caused by storms, fires or floods.
What you get from ABSA Islamic insurance
- Personal insurance cover for your vehicle and household
- Insurance cover for your commercial assets and vehicles
- A share of the Takafol Pool should it make a profit, based on contributions during that year (structured on a Waqf fund according to the principle of surplus share)
- Access to a range of free services (mechanical and electrical assistance), home and roadside assistance (for breakdowns), and great deals on products and travel services
Shari'ah Compliance
- Shari'ah Law governs the manner in which Muslim people conduct their lives, including banking. Islamic Banking is deduced from the Shari'ah Law, hence it differs from conventional banking, and forbids the payment or earning of interest, among other requirements.
- As an alternative financial system to conventional banking, each of the solutions within Absa Islamic Banking are managed and administered according to Shari'ah Law under the guidance of the Absa Shari'ah Supervisory Board – comprised of learned Muslim scholars.
- This independent board specialises in Fiqh Almua’malat (Islamic Commercial Jurisprudence), directing, approving, reviewing, supervising and monitoring the activities of Absa Islamic Bank to ensure Shari’ah compliance.
For more information
For more information, please visit your closest ABSA bank branch
Other services that ABSA Islamic banking offers
Islamic Cheque Account
Everyday transactional account that offers a full range of banking solutions and services
To qualify, you need to earn R3000 a month.
Do you want to be able to access and manage your money anytime, anywhere, while complying with Shari'ah Law? With an Absa Islamic Cheque Account, you will be able to manage your everyday banking needs, from making withdrawals, deposits, transfers and payments to requesting balances and statements – confident that all of the services are Shari'ah compliant.
An Absa Islamic Cheque Account also allows you to manage your money in a variety of convenient ways, including via the internet, your cellphone, an ATM, the telephone or your nearest Absa branch.
Not right for you? ABSA also also offer a Shari'ah compliant Islamic Savings Account.
Islamic Vehicle and Asset Finance
No matter what kind of vehicle or other movable asset you need, or whether it is for business or personal use, Absa Islamic Vehicle and Asset Finance will ensure that you get the best deal in a fully Shari'ah compliant manner.
Using the concept of Ijaarah, which is similar to leasing, you can enjoy access to a vehicle or other movable asset for a fixed period and price. This approach is Shari'ah compliant and allows you to benefit from the unique advantages as well, such as 100% financing and tax benefits.
Absa Islamic Vehicle and Asset Finance could be the right choice if you:
- Want access to vehicles or other moveable assets in a Shari'ah compliant manner
- Would like the certainty of fixed rental fees for the duration of the lease
- Would like flexible payment options that allow you to reduce your monthly rental fee when you have extra cash
- Would like the option of owning the asset on settlement of the lease
Islamic International Banking
If you are travelling overseas, Islamic International Banking will provide you with financial products that are Shari'ah compliant.
Islamic Savings
A Shari'ah-compliant transactional savings account that provides you with a pre-agreed profit-share payout and a card that you can use to access your funds at any time
What are the advantages?
- Shari'ah compliant
- Immediate access to your investment with no minimum or maximum investment period
- You are able to conduct all types of electronic payments and transfer transactions, and can access your funds via ATM’s or Absa branches
- If you have R10 000 or more in your account, certain transaction fees will be waived
- Statements on request
- The ability to make third party payments
- An annual profit share calculated at Absa’s financial year–end (31 December) and paid into your account on 25 January of the following year
How to qualify:
- A minimum initial deposit of R50 to open the account, and a minimum balance of R50 must be maintained
- Proof of residence
- Valid ID
Islamic Term Deposit
A Shari'ah-compliant fixed deposit account that offers a range of returns over a selection of investment periods
- Risk is low
- Minimum required is R1,000
- The term is 30 days to 365 days
Based on the Mudarabah principle, the Islamic Term Deposit is a fully Shari'ah-compliant investment option. With a minimum opening deposit of R1 000 and variable terms (30 Days and 365 days), this is an affordable investment product that offers competitive returns.
What are the advantages?
- Fully Shari'ah-compliant
- No hidden costs or monthly fees
- Pensioners will qualify for an additional profit share for a balance between R50 000 and R200 000 if kept for 365 days
Islamic youth account
A convenient Shari'ah-compliant banking option for Islamic youths under the age of 18, the Islamic Youth Account is an innovative combination of a transactional and savings account. This allows you the freedom to make the purchases that you need – without the worry of carrying around cash.
With your PIN-secure debit card, you will have the convenience of paying for goods and services at any point-of-sale; as well as having the flexibility of withdrawing cash at any Absa ATM or at selected retailers.
An annual profit share calculated at Absa’s financial year–end (31 December) and paid into your account on 25 January of the following year.
Not the right choice for you? Try the Islamic Savings Account
An Islamic Youth Account could be the right choice if you:
- Are under 18 years of age
- Want to withdraw from any Absa ATM nationwide
- Don’t want to carry around cash and prefer the safety of a debit card
- Want to be able to draw cash at selected retailers (Pick ‘n Pay, Shoprite Checkers, etc.)
- Want a debit card that is accepted countrywide and worldwide where the Visa logo is displayed
- Require a banking solution that is compliant with Shari'ah law
Islamic Profit Share
Mudarabah products follow a very well defined process of profit calculation and distribution. The products have been developed by Absa Islamic Banking for members of the Muslim community who wish to operate financially in line with Shar'iah Law.
How does it work?
- Absa Islamic Banking has well defined profit sharing ratios defined in the terms and conditions of each product. For instance, Islamic TargetSave account holders get 30% profit share allocated to the Islamic TargetSave book
- Profits are realised or received from Shari'ah compliant investment activities
Once realised or received, profits are shared between the customer and the bank at the pre-agreed profit sharing ratio - The customer portion of profit shares are distributed among customers based on the weighted average balance in each customer’s account for the financial period selected for Mudarabah investments
A practical example of proft share
The following data and assumptions are used to illustrate the process of calculation:
| Start of financial period: | 01 January 2X01 |
| End of financial period: | 31 December 2X01 |
| Profit distribution date: | 25 January 2X02 (as per the terms and conditions of a specific product) |
| Amount of investment: | R100 000 (assuming the amount is deposited on 01 January 2X01 and there are no withdrawals and no deposits during the financial period) |
| Number of days of deposit: | 365 days |
| Number of days of financial year: | 365 days |
| Type of product: | Islamic TargetSave |
| Profit Sharing Ratio: | 30% to customer 70% to bank |
| Profit for the financial period: | R15 000 |
Calculation for the weighted average balance:
(R100 000 X 365 deposit days) / 365 financial year days = R100 000
Calculation for the profit share:
R15 000 total of Mudarabah profit X 30% = R4 500 (Bank’s share R15 000 – R4 500 = R10 500)
Therefore the return on investment on a R100 000 weighted average balance is:
[ R4 500 (from B) / R100 000 (from A) ] *100 = 4.5%
Once the profit calculations have been performed and approved by the AIB management and Shari'ah Supervisory Board, the profit amounts are deposited into customers’ respective accounts on 25 January 2X02.
Any accounts opened after the financial period (31 December 2X01 as per the example) receives their profit share from the next financial period. Any accounts closed after 31 December but before 25 January do not receive any profit share.
Thank you for reading up on ABSA Islamic banking, visit any ABSA branch for assistance.
