MURABAHA FOR LOCAL & IMPORTED GOODS FINANCING

Murabahah - the concept:

A contract of sale between a customer and Dawood Islamic Bank Ltd. (“DIBL”) under which DIBL first purchases the goods (permissible under Shari’ah) at the request of the customer and then sells these goods to the same customer after adding profit. The Murabahah Sale Price includes all acquisition costs borne by DIBL and a mutually agreed profit.

Murabahah Transaction at a glance:

• Request from the customer to DIBL for the purchases of specific local / imported goods.
• Appointment of customer as agent of DIBL.
• DIBL purchases the goods upon request of the customer and takes ownership, thus transforming its money into goods.
• After purchase of goods the risk of the goods is borne by DIBL until the ownership of the goods is transferred to the customer by way of offer and acceptance. At the same time, specification of the goods, delivery, place and other terms of the contract are ensured.

DIBL’s Murabahah Financing is available for local and foreign purchases of:

• Raw Materials
• Commodities
• Equipments/Machinery
• Other tangible assets

Types of Murabahah:

• Spot Payment Murabahah
• Immediate repayment in cash against Letters of Credit (Sight)
• Deferred Payment Murabahah Repayment on mutually agreed future date

All agreements/documents are approved by DIBL’s Shari’ah Advisor.

Non Fund Based Products

• Sight and Usance Import Letters of Credit: These facilities are available at DIBL to facilitate traders, manufactures and service providers to import goods for their day to day Shari'ah Compliant business activities.
   

• Letter of Guarantee: The facility is available at DIBL to cater for the requirements on behalf of the Trade/ Manufacturing/ Construction industry and Service providers.