Murabaha Slides
Murabaha Slides
Murabaha Slides
6-payment of price
in different 2-Agency Contract
installments
Delivery of
Commodity of to 3-Delivery of
Customer Commodity
4-Contract Stage
Firstly,
The client and the institution sign an over-all agreement whereby
the institution promises to sell and the client promises to buy
the commodity on an agreed ratio of profit added to the cost.
Bank Client
Agreement to
Murabaha
Secondly,
The institution appoints the client as his agent for purchasing the
commodity on his behalf and an agreement of agency is signed
by both the parties
Bank Client
Agreement to
Murabaha
Agency
Agreement
3-Delivery
of
Commodity
Thirdly,
The client purchases the commodity on behalf of the
institution and takes its possession as an agent of the institution,
and delivers it to the Bank. (Constructive or physically)
Bank vendor
Contract Stage
Fourthly,
The client makes an offer to purchase the commodity from the
institution, which will be accepted by institution.
Offer by client
client
Bank Client
Acceptance by Bank
Fifthly,
The Commodity is delivered to the customer and the the
ownership as well as the risk of the commodity is transferred to
the client.
Commodity delivered
&
Transfer of Title
Bank Client
Payment of
Price in
different
Installments
The most essential element of the transaction is that the
commodity must remain in the risk of the institution
during the period between the third and the fourth stage..
All these capacities must be kept in mind and must come into
operation with consequential effects each at its relevant stage
and these different capacities should never be mixed up
confused with each other.
Default Case:
In the event of default by the buyer (client) in respect of the
payment of the purchase price on the due date, the PRICE
cannot be increased. However, if he has undertaken in the
agreement to pay an amount for a charitable purpose, he shall be
liable to pay. & that must not be credited to the income of the
institution.
Rebates in Early Payment:
Documentation charges:
The documentation charges may be charged to the both parties
Rollover in Murabahah:
Rollover in Murabahah is not possible since each Murabahah
transaction is for a particular asset. A new Murabahah can only
be executed for the purchase of a new asset.
Purchase Evidence:
The customer is required to submit purchase evidence and
declaration. The purchase evidence must confirm that customer
as an agent has purchase the goods after agency agreement