Master Murabaha Financing Agreement

Master Murabaha Financing Agreement

A De Murabaha certificate is issued in the name of an applicant (importer). The bank issuing the accreditation undertakes to pay a sum of money in accordance with the conditions described in the akkreditiv. Since the creditworthiness of the bank replaces that of the applicant, payment is guaranteed to the beneficiary (exporter). The exporter benefits since the bank assumes the risk of payment. Under the provisions of the Treaty of Murabaha, the importer is required to reimburse the bank for the costs of goods, plus a profit premium. Many argue that this is simply another method for calculating interest rates. However, the difference lies in the structure of the Treaty. In the case of a Murabaha sales contract, the bank buys an asset and then resells the asset to the client with a profit fee. This type of transaction is halal or valid, in accordance with Islamic Sharia / Sharīʿah. The Murabahah, its mechanism, accounting standards, Sharia standards and design will be further debated during islamic financial certification, Islamic banking courses, the Masters in Islamic Finance and the PhD Islamic financing programs offered by aims` Islamic Financial Institute. In a Murabaha sales contract, a customer asks a bank to buy an item on their behalf. At the customer`s request, the bank enters into a contract setting out the costs and benefits of the item, with reimbursement usually made in instalments.

Since a fixed fee is levied instead of Riba (interest), this type of loan is legal in Islamic countries. Islamic banks are prohibited from collecting interest on loans, according to the religious principle that money is only a medium of exchange and has no intrinsic value; Therefore, banks must collect a flat fee for the continuation of day-to-day operations. Murabaha`s form of financing is usually used instead of credits in different sectors. For example, consumers use Murabaha when buying household appliances, cars or real estate. Companies use this type of financing to buy machinery, equipment or raw materials. Murabaha is also often used for short-term trade, for example.B. for issuing flow-throughs for importers. Murabahah is a contract in which, at the request of the customer, the Islamic Bank buys the asset from a third-party seller and resells it to the customer, either for immediate payment or on a deferral basis. In principle, Murabaha`s financing is the sale of property at a loss, plus an agreed profit. . . .


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