Al-Murabahah is a "cost-plus" sale contract. It is a facility granted to customers for financing their short term working capital requirement by way of lump sum deferred payment cost plus profit.
Features
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The cost must be revealed; |
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The price and tenure of the lump-sum deferred payment must be agreed upon by the Bank and the customer; |
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The Bank appoints customer as an agent (Al-Wakalah) to purchase on its behalf; |
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Marginal deposit may be imposed; |
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Trade transactions for sight (D/P) only are allowed; |
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Financing for item of saleable value; e.g. purchase of stock and inventories, spares and replacements, semi-finished goods and raw materials. |
Benefits
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Advance made by the Bank on behalf of buyer to pay the seller; |
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Buyer pays the Bank on deferred payment term. |
