Islamic Concept

 

Islamic Concept Applicable To Trade Finance Products

 

Wakalah (Agency)

Wakalah refers to a contract where a party authorizes another party to act on behalf.

Products under Wakalah:

  • Inward Letter of Credit-i
  • Outward Letter of Credit-i
  • Inward Bills for Collection-i
  • Outward Bills for Collection-i

Murabahah (Cost-Plus Profit)

Murabahah is a “cost-plus profit” sale contract. It is a facility granted to bank’s client for financing their short term working capital requirement by way of lump sum deferred payment cost plus profit.

Products under Wakalah:

  • Murabahah Working Capital Financing-i
  • Accepted Bills-i (Purchase/Import)
  • Outward Letter of Credit-i

Musyarakah (Joint Venture)

Musyarakah is defined as a joint venture on profit / loss sharing between a bank and its client whereby the client has to contribute part of the capital in a joint venture project. The profit derived from the project shall be distributed at a profit ratio as agreed between the bank and its client.

Products under Wakalah:

  • Outward Letter of Credit-i

Kafalah (Guarantee)

Kafalah is a contract of guarantee in which one party guarantees the fulfillment of a claim or performance of an obligation which is due to another party in a case of default.

Products under Wakalah:

  • Shipping Guarantee-i
  • Bank Guarantee-i

Bai’ Dayn (Debt Trading)

Bai’ Dayn refers to the sale of a debt arising from trade and services transaction in the form of a deferred payment sale. The client sells this debt to the Bank at a discount.

Products under Wakalah:

  • Bai’ Al-Dayn Working Capital Financing-i
  • Foreign and Domestic Bill Purchased-i
  • Accepted Bills-I (Sales/Export)
Other Trade Finance To Choose From
Trade Finance
Letter of Credit-i (LC-i/DC)

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Trade Finance
Accepted Bills-i (AB-i)

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Trade Finance
Foreign/Domestic Outward Bill for Collection-i (FOBC-i/DOBC-i)

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Trade Finance
Foreign/Domestic Inward Bill for Collection-i (FIBC-i/DIBC-i)

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Trade Finance
Al Kafalah Bank Guarantee (KBG)

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Trade Finance
Al Kafalah Shipping Guarantee (KSG)

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Trade Finance
Foreign/Domestic Bill of Exchange Purchase-i (Authority to Purchase)

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Trade Finance
Bai’ Al Dayn Working Financing-i (BWCF)

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Trade Finance
Foreign/Domestic Bill of Exchange Purchase-i (Documentary)

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Trade Finance
Murabahah Working Capital Financing-i (MWCF)

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