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 Murabahah:

  • Murabahah Working Capital Financing-i
  • Accepted Bills-i (Purchase/Import)
  • 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 Kafalah:

  • 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  Bai’Dayn:

  • Bai’ Al-Dayn Working Capital Financing-i
  • Foreign and Domestic Bill Purchased-i
  • Accepted Bills-I (Sales/Export)

You might also be interested in

Foreign/Domestic Bill of Exchange Purchase-i (FBEP-i/DBEP-i) – Authority to Purchase
Bai’ Dayn Working Capital Financing (BWCF-i)
Foreign/Domestic Bill of Exchange Purchase-i (FBEP-i/DBEP-i) – Documentary
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2024-06-13 08:48:21