Islamic or Not?

Something really struck me yesterday. Me and my wife have actually bought a new investment property in Shah Alam. The S&P has been signed and waiting for stamping. I'm currently trying to secure a loan with Hang Suka Bantu Cek bank. When I enquired about the status of our S&P to my lawyer, she asked me about my financing plan. She advised me to take up an Islamic property loan. If not, I would be involved with riba and its not good for a Muslim etc. I was given a ceramah lah basically.

To put things straight, I actually planned to take up an Islamic loan with Hang Suka Bantu Cek bank. Unfortunately due to the Islamic concept used by the bank, its not applicable for incomplete properties. I only came to know about this when I wanted to sign the application form. Instead, I applied for a conventional loan. One might ask, why did I compromised with my principal of supporting Islamic banking when I can actually find other Islamic loan with other banks. There are aplenty in the market.

Here are my reasons:

1. The agent has been really helpful with my application. She has been responsive and prompt with her service. Unlike Cek Ingat Mu Bagus banks' agents. Even asking for quotation is like asking for loan approval. What else when I asked the agent to come and collect the required documents. He took his own sweet time and will only come over the weekend. Their service has been poor even though I engaged 2 agents.
   
2. I had a few bad experiences with Rasa Hebat Benor bank. It was during loan application for my second property some where last year. It took me almost 3 months to get the loan approved just because their different departments does not speak to each other. Even complaining to the respective departments did not help. I almost gave up and did not know who to turn to for complaints. The reason I wanted the loan from Rasa Hebat Benor bank is because I had an existing loan with that bank. Its just about convenience in managing the loans.
3. Rasa Hebat Benor bank went a step further. In May, I complained to the bank that they actually deduct more than what they were supposed to for my April installment. Although they attended to my complaint, the reasons given were really unsatisfactory. I just gave in hopefully this matter will be solved. Perhaps they just forgot to issue a payment advice letter for my installments. But the same thing happened to my May and June installments even after they issued the new payment advice. I complained again to their customer service. Until now, I haven't received any feedback from them. By the way, both the loans are Islamic loans. Is this how an Islamic bank should operate? Simply deducting the installment amount not in accordance with the payment advice. Isn't that riba' in a way? I don't mind paying what I'm supposed to, but what is so difficult with issuing a new payment advice when there is a change in the installment amount stating the reasons such as increase in BFR or change in the profit rate?
4. An additional point. This is extracted from my loan agreement with Rasa Hebat Benor bank. "....upon the occurrence of the Abandonment Event, the Customer shall.... pay to the bank based on the following formulae:

Disbursed amount + Outstanding Forward Ijarah Payments
For info, this is a Musyarakah Mutanaqisah (MM) agreement where it is based on joint venture between the bank and customer to purchase a property. The share holding of the customer on the property is gradually transferred from the bank as the loan tenure goes on. Well it is obvious to me that this is unfair towards the customer in the event of abandonment since the customer will have to bear all the costs involved up till the abandonment. Senang sama2, susah sorang2 yea? Apa punya bank lah. Is this an Islamic value that the bank is trying to project? You don't need to be an ulama' to know this is not fair. I just don't know what kind of shariah advisors the bank has.
My conscience is pretty clear. If you are promoting Islamic banking, the values must be right i.e, no riba', fair, just etc. The bank is an entity which has the capabilities to access whether the developer has the means in completing the project as opposed to an individual. If the bank deemed that the project is risky, then just don't approve the loan. Its as simple as that. But when the bank approves the loan, they must be willing to take the risk as well. If the project goes bust, tanggung sama2 lah. Bukan customer sorang2 tanggung. Hang Suka Bantu Cek bank is pretty clear on this stuff. Their MM loan agreement is deemed not suitable for incomplete property. So they just don't offer it. And by doing that, they are avoiding any misunderstanding that may arise and tarnish Islamic banking values. So if you can't offer a truly Islamic banking system, just don't offer it. Full stop.

Unless my loan is rejected by Hang Suka Bantu Cek bank, I plan to take up the loan even though its a conventional loan just because the agent provided me with good service. To me, that shows an Islamic value. What's the point of taking up an Islamic loan when dealing with agents and servicing the installments does not adhere to Islamic values?

My advice to those agents selling Islamic financial products, treat your customers with respect. Islamic banking system is not just about its name. Islamic values come together. Agents are the front line of Islamic banking. Show good values and Islamic financial system will be respected.

As for me, this time around is an exception even though some might argue that I did not have a strong reason not to take up Islamic loan. I will continue to support Islamic banking in my journey towards my financial goals. Hopefully those involved with the industry will buckle up and may Allah bless all of us.