A financing facility has been approved for a customer, whereby it was allowed to utilize the facility through multiple Murabahah transactions under the facility limit during the facility period
Fatawa Question
An Islamic bank has raised the following query. A financing facility has been approved for a customer, whereby it was allowed to utilize the facility through multiple Murabahah transactions under the facility limit during the facility period. Under each Murabahah transaction, the Islamic bank purchases the goods, and sells the same to the customer with a higher price and deferred payment. In one of these Murabahah transactions, it happened that the customer could not pay the deferred sale price under that Murabahah transaction on the scheduled date and requested the bank to extend the payment date by three months. Since there is clear guidance from the shariah board not to increase the Murabahah amount if it becomes past due, the Islamic bank has suggested the following options subject to approval from its shariah board : To reschedule the overdue Murabahah amount for another three months and charge the customer an administration fee equal to the lost profit for the proposed period. To reschedule the overdue Murabahah amount with a condition to increase the profit element in the next Murabahah by the loss of profit for three months on the current Murabahah. Shariah guidance is required to see if either of the provisions is Shariah compliant.
Fatwa
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Publisher
Publication Date
2015-05-13
Country of Publication
Malaysia
Main Subjects
Economics & Business Administration
Islamic Studies
Data Type
Fatawa
Language
English
Record ID
BIM-783024
American Psychological Association (APA)
Hassan, Husayn Hamid. 2015-05-13. A financing facility has been approved for a customer, whereby it was allowed to utilize the facility through multiple Murabahah transactions under the facility limit during the facility period. . Kuala Lumpur Malaysia : Islamic Finance News.
https://search.emarefa.net/detail/BIM-783024
Modern Language Association (MLA)
Hassan, Husayn Hamid. A financing facility has been approved for a customer, whereby it was allowed to utilize the facility through multiple Murabahah transactions under the facility limit during the facility period. Kuala Lumpur Malaysia : Islamic Finance News. 2015-05-13.
https://search.emarefa.net/detail/BIM-783024
American Medical Association (AMA)
Hassan, Husayn Hamid. 2015-05-13. A financing facility has been approved for a customer, whereby it was allowed to utilize the facility through multiple Murabahah transactions under the facility limit during the facility period. Kuala Lumpur Malaysia : Islamic Finance News.
https://search.emarefa.net/detail/BIM-783024