Trade Finance Products
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.
Bai’ Al Dayn refers to the sale of a debt arising from trade and services transaction in the form of a deferred payment sale. The customer sells this debt to the Bank at a discount.
LC-i / DC is similar to the conventional letter of credit. It is written undertaking given by the Bank at the request of the buyer to pay a seller (the beneficiary) to the effect that the Bank which issues the credit will pay the seller (beneficiary) a certain sum of money, as stipulated in the letter of credit provided the seller complies with the terms and conditions of the Letter of Credit.
There are two types of facilities available to exporters under AB-i Scheme:
FBEP-i/DBEP-i (Documentary) is a facility granted by the BMMB to their Client (seller) whereby the BMMB negotiates or purchases Client’s foreign or domestic bills on collection basis under contract of ‘Bai’ Dayn’. A short term financing whereby the bank purchases the Client’s right to the debt.
FBEP-i/DBEP-i (Authority to Purchase) is a facility granted by the BMMB to the Client (seller) whereby BMMB negotiates or purchases Client’s foreign or domestic bills presented under Documentary Credit (DC) under the principle of ‘Bai’ Dayn’.
This is a guarantee provided by a person (the Bank) to the owner of a goods, who had placed or deposited his goods with a third party, made under the concept of Al-Kafalah or Al-Dhamanah whereby any subsequent claim by the owner for his goods must be met by the guarantor and the third party.
This is a surety given by the Bank (made under the concept of Al-Kafalah of Al-Dhamanah) whereby agrees to guarantee a liability of a customer/applicant in case of the latter defaults in fulfilling his obligation.
This service is under the shariah principle of Wakalah (Agency) where it facilitates handling of Domestic/Foreign inward documents received from a Remitting Bank or Seller for presentation to Buyer or Importer.
Facility granted to the seller to finance their trade debt, which arises from sale contract of goods (halal), presented under Documentary Credit under the principle of ‘Bai Al-Dayn’.