MUSCAT, 20 August 2019
Meethaq, the pioneer of Islamic banking in Oman from Bank Muscat, has announced the launch of a complementary Education Cover Plan for its Baraem Savings Account. The Baraem Savings Account is a children's savings account that is based on the Sharia contract of ‘Mudaraba’.
The account can be opened by the parent or legal guardian of the child in order to build a large savings amount that can take care of the future needs of the child, particularly with regards to specific goals. The Baraem account is a tier- or slab-based savings account where higher balances are paid a higher profit rate so as to encourage a healthy savings plan. The complementary Education Cover Plan will now be offered by Meethaq to all account holders who have a minimum average balance of RO 1,000 in their child's Baraem Savings account. This cover will be applicable in cases like the death or permanent total disability of the parent or guardian, which could drastically affect a child’s future chances of success.
The plan will take care of the school fees of the child till he or she completes Grade 12. Up to four children can be covered by this Education Cover Plan through the maintenance of four separate accounts. Meethaq will bear the cost of contribution for the Takaful plan which is being implemented in coordination with a Takaful insurer. The plan will particularly benefit the parents of young children whose future prospects can be hampered by the absence or disability of the family’s breadwinner. The complementary plan is available to all existing and new Meethaq customers who will also enjoy the monthly distribution of profit at the same time.
It is particularly noteworthy that a Baraem account can be opened with an amount as low as RO 50 for a child who is 14 years old or younger. This account is intended to help create a lump-sum amount for the child’s future needs. Hence, this account does not have the options of withdrawal through ATMs or cash over the counter at Meethaq branches as easy withdrawals from this account could go against the entire purpose of saving up for a future need. However, in case of any financial emergency, the parent or guardian may transfer the funds into their Meethaq account through Internet or Mobile banking or by applying for the same at the branch.
The Baraem account holder provides funds as ‘Rabb-ul-Maal’ and Meethaq invests these funds as ‘Mudarib’ (the fund manager). Based on this relationship, the depositors and Meethaq become beneficiaries of the profit earned, if any. Meethaq has adopted the best practices in Islamic banking and finance worldwide to combine a robust model which protects customers and complements the Islamic banking industry. Every Meethaq product goes through the process of Shari’a compliance certification by the Shari’a Supervisory Board and is created in line with the guidelines of the Central Bank of Oman.