Murabahah - Appendix E Definitions

Transcription

1. Shari ’ah Standard No. (8): Murabahah Appendix (E) Definitions Murabahah It is the sale of a commodity by an institution to its customer (the purchase orderer) as per the purchasing price/cost with a defined and agreed profit mark-up (as set out in the promise/ promise/Wa’ Wa’d), in which case it is called a banking Murabahah. The banking Murabahah involves deferred payment terms, but such deferred payment is not one of the essential conditions of such transaction, as there is also a Murabahah arranged with no deferral of payment. In this case, the seller only receives a mark-up that only includes the profit for a spot sale and not the extra charge it would, otherwise, receive for deferral of payment. Commitment Fee A commitment fee is the percentage or amount which the Institution takes from the customer to start processing the transaction even though a sale contract may not be concluded). ’Arboun The term ’Arboun Arboun means an amount of money that the customer as purchase orderer pays to the Institution after concluding the Murabahah sale, with the provision that if the sale is completed during a prescribed period, the amount will be counted as part of the price. If the customer fails to execute the Murabahah sale, then the Institution may retain the whole amount. Syndicated Financing A syndicated financing is a partnership relationship for financing a particular project which two or more parties has interest to finance. They will distribute the profit or revenue as per agreement. In other words, syndicated financing is the acceptance of a number of companies (financial Institutions) to enter into a joint investment transaction through one of the permissible investment instruments with an understanding that one of the 230
2. Shari ’ah Standard No. (8): Murabahah parties assumes leadership of the deal. During the period of the transaction, the transaction would enjoy an independent liability separated from their companies. Credit Facility A credit facility is an upper limit for a customer’s Murabahah transactions. This credit facility may be restricted to a specified type of item, or to a specified period of time. 231