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Thursday, 19 July 2007

Bank Danamon Launches Dirham Card -The First Syariah Card in Indonesia

The First Syariah Card in Indonesia; Offers the Benefits of Conventional Credit Cards, Based on Syariah Principles

Jakarta, 19 July 2007 (ANTARA) - PT Bank Danamon Indonesia Tbk. (Bank Danamon) and MasterCard today launched the Dirham Card, the first ever syariah card in Indonesia which uniquely offers the full functionality and benefits of a conventional credit card, while the relationship among transacting parties is based on syariah regulations."As a major milestone of our business this year, the introduction of the Dirham Card is intended to complete our range of card offerings to our customers," stated Sebastian Paredes, President Director of Bank Danamon. "This business initiative also demonstrates our strength and continued commitment in the syariah banking segment as well as in the cards business," he added.During the past few years, Bank Danamon has leaped from 12th to 6th in its rank among the largest card issuers in Indonesia; hence it is now one of the fastest growing card businesses in the country."We are proud to introduce the Dirham Card as our special offering in relation to Bank Danamon's 51st anniversary on July 16th," stated Hendarin Sukarmadji, Syariah Director of Bank Danamon. "We believe that this initiative supports the intention of Bank Indonesia for a more active role of syariah banking in Indonesia's economic development, and contributes to Bank Danamon's strategic priority towards becoming a leading financial institution in Indonesia," he added.The Dirham Card is a product of the collaboration between Bank Danamon and MasterCard with all networks or merchants throughout the world to provide payment services to card holders."The uniqueness of the Dirham Card lies in the 'akad', the term for transaction contract or scheme which it uses; namely Ijarah, Kafalah and Qardh," Hendarin. The Dirham Card is introduced based on Fatwa No. 54/DSN-MUI/X/2006 of the Indonesian Ulemas Council's National Syariah Board or Dewan Syariah Nasional Majelis Ulama Indonesia (DSN-MUI) and Bank Indonesia Letter No. 9/183/DPbS/2007 on the approval for the Danamon Syariah Card.The three contracts, or 'akad', can be distinguished as follows. "On the Ijarah scheme, the card issuer acts as the provider of payment and service system for the card holder. For the provision of this service, the card holder is charged a membership fee," explained Hendarin. "Meanwhile, in the Kafalah transaction scheme, Bank Danamon Syariah as card issuer, acts as the guarantor (kafil) for the card holders against the merchants, of all obligations to pay (dayn) which arise from the transactions between card holder and merchant, and/or cash withdrawal from banks other than the ATM of the bank issuing the card. Based on Kafalah, the card issuer can accept a fee (ujrah kafalah)," he continued."Under the Qardh scheme, the card issuer acts as the lender (muqridh) to the card holder (muqtaridh) through the cash withdrawal from the bank or ATM of the card issuing bank. The card holder is therefore obliged to return the same amount of funds he withdrew at the time," stated Hendarin.In summary, the benefits offered by the Dirham Card can be several, namely:- Does not implement interest mechanisms. Instead uses a 'rent' system based on the 'Ijarah' principles;- Competitive and a 'fair' pricing as it employs a fee calculation which appreciates partial payment;- Manages a charity fund, or Qardul Hasan, generated from the business; for example from late fees, which will be used to fund charity activities;- The basic benefits including to pay for utilities: electricity, telephone, water, cable TV bills, get merchants discounts and purchase cell phone airtime value reload vouchers;- Enable card uses for spiritual purposes, such as umrah pilgrimage, or spiritual tours;- Worldwide acceptance at all MasterCard networks throughout the world."Bank Danamon's integrated information technology enables support for the Dirham Card on its conventional and Syariah branch as well as its ATM networks, which will allow customers to conduct transactions in all provinces throughout Indonesia," continued Hendarin. As of March 31, 2007 Bank Danamon operates close to 1,400 branches including its Danamon Simpan Pinjam (DSP), Syariah units and Adira. In addition, it provides access to over 14,000 ATMs, including those in association with ATM Bersama and ALTO networks nationwide, and ATM DBS Bank and Cirrus all over the world.Furthermore, Bank Danamon Syariah customers can enjoy the ease of shopping in stores which bear the MasterCard Electronic logo throughout the world, as well as phone banking services through the Danamon Access Center (021-3435 8888) and HP Banking Danamon.Vadyo Munaan, Vice President and Senior Country Manager, Indonesia, MasterCard Worldwide, stated, "MasterCard is committed to always provide payment product innovation specifically designed to supplement the lifestyle and needs of MasterCard card holders. We understand the needs of cardholders in Indonesia and the launch of the Syariah-compliant Dirham card provides cardholders with an alternative payment solution. MasterCard is very proud to have this opportunity to work with Danamon in launching the Dirham Card."

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