Treasury Gold Business (sourcing) Retail Gold Offering Wholesale Gold Offering 1 1
Gold Account 2 Shariah Compliant Ability to conveniently buy and sell gold Backed by physical Gold (Allocated) that is held in NCB vaults Customers can purchase and sell Gold in small denominations of 10 grams multiples Delivery can be facilitated if customer accumulated 1KG or multiples of a Kilo Gold Accounts are denominated in grams Fineness of Gold is 999.9 3 2
No minimum or maximum units of Gold holdings restrictions Zakat is the responsibility of customer Vault and transit of Gold are fully insured Prices of Gold Account units are linked to XAU in Thomson Reuters 4 Storage fee is payable based on Gold quantity held Fixed delivery cost, upon delivery (in case delivery conducted through branches other than the main branch) Buy and Sell of Gold is free 5 3
6 Treasury is responsible to manage the Gold vault of NCB, hence they manage the Gold backing Gold Accounts Gold bullions backing the Gold accounts are separated for this purpose in the vault It is substantial that customers holdings are backed by Gold all the time Customers will be able to buy and sell Gold through different channels (like branch, Mobile, Online) and transactions will be T+0 7 4
Treasury will source Gold through Gold consignment business that is Shariah compliant 8 Gold must be owned by NCB and possess it before selling it to its customers Selling of Gold and its payment has to be immediate (in Majlis Al-Aqd) either physically or constructively It is not allowed to have the sale conditional (i.e the buyer or the seller has the right to call off the sale in a certain period Khiyar Alshart 9 5
Shariah Guidelines has to be taken in consideration in buying and selling Gold with customers or with suppliers Gold delivery when selling Gold to customers has be either physical of through accounting entries to customer account (constructive delivery). Physical delivery has to be available to customers through NCB branches Keeping Gold with NCB could be either the form of Qard, hence NCB cannot charge any custody or delivery charges. Or could be the form of Wadia (deposit), hence NCB can charge custody charge and is prohibited to charge delivery fee as its mandatory upon the bank 10 Customer must have the right to take physical delivery without any charge from main branches. However NCB can charge delivery fees in case delivery conducted from branches other than the main branches Its not allowed for NCB to cover its liabilities risks through conventional tools like paper Gold or Gold index, but it can do that through Shariah compliant tools only 11 6
Gold Consignment (Lease) This product is still in the development phase and not realized yet. However Shariah resolutions has been issued for this product 12 Treasury has in place a consignment agreement (lease agreement) with international counterparties Treasury leases Gold bullions from a lessor Treasury pays lease payments to lessor for specific tenors that can be extended upon request Lessor ships Gold to NCB, which is kept in Gold vault of NCB Whenever there is need (for example, customer demands to purchase Gold) NCB purchases leased Gold and sell it to customer 13 7
Leased Gold bullions has to be identified by unique serial number at the time of lease transaction NCB is liable to return the same bullions in case of lease expires and no sale is realized Lease tenor and price has to be determined and agreed upon at the time of lease transaction In case there is a delay in lease payment it is not permissible to charge any fees against the delay or to change the price of lease 14 Leased Gold must be owned to the lessor at the time of lease transaction NCB cannot sell the leased Gold unless it legitimately purchase it first 15 8
Physical Gold Spot Sale and Delivery Physical Gold financing Physical Gold refinancing 16 Customer request for a certain quantity of Gold bullions NCB offer it to customer using its vault Gold stocks through a sale contract and deliver it to the customer All Gold Shariah Guidelines regarding selling and delivery applies to this product 17 9
Customer request for financing his purchase of a certain quantity of Gold bullions through NCB NCB conducts a Tawarruq transaction with the customer that results in cash Customer uses cash to purchase physical Gold through NCB Treasury facilitates a swap deal for the customer in which he enters a spot transaction to purchase Gold and sells Dollars and a forward transaction to sell Gold and purchases Dollars 18 Maturity of Gold financing becomes due and customer needs an extension NCB conducts a Tawarruq transaction with the customer that results in cash with new maturity Customer uses cash to settle his outstanding liability Treasury facilitates a swap deal for the customer in which he enters a spot transaction to purchase Gold and sells Dollars and a forward transaction to sell Gold and purchases Dollars 19 10