Dear Valued Customers,

With effect from 1^st July 2017, Al Rajhi Banking & Investment Corporation (Malaysia) Bhd (ARBM) will start imposing recovery of actual collection cost to new and existing retail financing customers who fail to pay their monthly instalment on the due date . This is in line with Bank Negara Malaysia’s Guidelines on Late Payment Charges.

It is expressly agreed by both parties that the Bank shall be entitled to impose on the customer, compensation on the amount of actual loss incurred by the Bank as a direct result of delay in payment or default by the Customer based on the following mechanism: 

(a) During Tenure 

i. For default of any payments during the Facility Period at the compensation rate of one per centum (1%) per annum or such other rates approved by Bank Negara Malaysia OR the approved actual recovery cost of managing past due portfolio approved by ARBM’s Shariah Board on the overdue schedule payment whichever is lower, calculate from the date immediately following the date of such default until the date of receipt of payment in full;

ii. For default causing the Agreement to be terminated or brought to court for judgement prior to the expiry of the Facility Period at the compensation rate of one per centum (1%) per annum or such other rates approved by Bank Negara Malaysia OR the approved actual recovery cost of managing past due portfolio approved by ARBM’s Shariah Board on the outstanding Commodity Sale Price, whichever is lower;

(b) After Expiry of the Facility Period

For default of any payment exceeding the Facility Period, at such rate which shall not be more than Bank Negara Malaysia’s prevailing daily overnight Islamic Interbank Money Market (“IIMM”) rate or such other rates approved by Bank Negara Malaysia OR the approved actual recovery cost of managing past due portfolio approved by ARBM’s Shariah Board on the outstanding Commodity Sale, whichever is lower.

Price, subject to any rebate that may be applicable, calculated from the date immediately following the expiry of the Tenure until date of receipt of payment in full. 

(c) Post Judgement

For default of payment under this Agreement where judgement amount has been awarded by the court, at such rate which shall not be more than Bank Negara Malaysia’s prevailing daily overnight Islamic Interbank Money Market (“IIMM”) rate or such other rates approved by Bank Negara Malaysia OR the approved actual recovery cost of managing past due portfolio approved by ARBM’s Shariah Board on the basic judgement sum, whichever is lower, subject to any rebate that may be applicable, calculated from the date the judgement is made until the judgement sum is fully settled. 

The recovery of the actual collection amount shall not be compounded and the reference rate for the actual loss shall be determined at the point of default and computed on a daily basis from the payment due date.

The approved actual recovery cost of managing past due portfolio approved by ARBM’s Shariah Board for 2016 was RM8.10

** “IIMM” Rate is defined as the daily weighted average for overnight rate of the Mudharabah Interbank Investment at the Islamic Money Market.