Question

D1. Mr. Abdullah is an engineering graduate who completed his degree recently and joined as a quality controller in Muna Noor Manufacturing & Trading LLC. His monthly salary is 1500 OMR. He is living in Sohar. His company located in Rusayl. Every day he is travelling a long distance to his job. So he is planning to buy a new house nearby Rusayl area. He is having initial amount of 5000 OMR cash in his hand. But the rate of the new villa is 25000 OMR. He is planning to approach the Oman Housing Bank to borrow a housing loan to purchase the new villa. This is the situation. Answer the following questions: (a). In your opinion, analyze the functions of Oman Housing bank and how it will provide services to Mr. Abdullah? Give your opinion on this. (b). If you are the financial adviser of Mr. Abdullah what will be the alternative method suggest him to rise the loan to purchase the villa? Justify your answer with explanations?  

Answer 1

1.a) function of Oman housing bank is to issue various type of loans to loan seekers who wants to avail the housing loan and Oman housing Bank, is also strived to provide them with also assistance in regard to housing loan suitability of various plan along with it also believes in easy and customised lending at low prices.

Since it is an Islamic Bank, it will provide up with Risk sharing techniques and it will be with Mr Abdullah a risk sharing partner and then it will issue the loan to him.

b) I can suggest him to buy the housing loan through Commercial Banks at they will offer more flexible risk sharing agreement and easy terms and conditions than housing Bank, there will be a high degree of flexibility in risk sharing.