The Islamic bank has been approached by a client to establish a letter of credit (LC) for the import of goods from another country with a request to finance the import under a Murabahah facility
Fatawa Question
The Islamic bank has been approached by a client to establish a letter of credit (LC) for the import of goods from another country with a request to finance the import under a Murabahah facility. The LC shall have the following payment terms to the supplier (beneficiary of the LC) : A. Twenty percent of the LC amount to be paid as an advance payment ; B. Forty percent upon arrival of the required documents drawn under the LC, representing shipment of goods ; C. Balance 40 % after 60 days from the date of documents arrival. Can the Islamic bank finance the above transaction by way of Murabahah ? If so, will there be separate Murabahah agreements signed with the client for each stage of payment ? Also, how shall the multiple payments to the supplier be treated when it comes to calculating Murabahah profit ?
Fatwa
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Publisher
Publication Date
2013-05-15
Country of Publication
Malaysia
Main Subjects
Economics & Business Administration
Islamic Studies
Data Type
Fatawa
Language
English
Record ID
BIM-784621
American Psychological Association (APA)
Hassan, Husayn Hamid. 2013-05-15. The Islamic bank has been approached by a client to establish a letter of credit (LC) for the import of goods from another country with a request to finance the import under a Murabahah facility. . Kuala Lumpur Malaysia : Islamic Finance News.
https://search.emarefa.net/detail/BIM-784621
Modern Language Association (MLA)
Hassan, Husayn Hamid. The Islamic bank has been approached by a client to establish a letter of credit (LC) for the import of goods from another country with a request to finance the import under a Murabahah facility. Kuala Lumpur Malaysia : Islamic Finance News. 2013-05-15.
https://search.emarefa.net/detail/BIM-784621
American Medical Association (AMA)
Hassan, Husayn Hamid. 2013-05-15. The Islamic bank has been approached by a client to establish a letter of credit (LC) for the import of goods from another country with a request to finance the import under a Murabahah facility. Kuala Lumpur Malaysia : Islamic Finance News.
https://search.emarefa.net/detail/BIM-784621