business banking

Murabaha is best suited for customers to meet the short term working capital requirements of any business for purchase of raw material, goods and merchandising as well as export financing and Import financing etc.

Salam:

Salam (advance payment against deferred delivery of goods) means a kind of sale whereby the seller undertakes to supply specific goods to a buyer at a future date in consideration of a price fully paid in advance at the time the contract of sale is made. The specifications, quality and quantity of the commodity must be determined to avoid any ambiguity which could become a cause of dispute. Date and place of delivery must be agreed upon but can be changed with mutual consent of the parties.

Istisna:

Istisna is a mode of sale, at an agreed price, whereby the buyer places an order to manufacture, assemble or construct, or cause so to do anything to be delivered at a future date. The commodity must be known and specified to the extent of removing any ambiguity regarding its specifications including kind, type, quality and quantity etc. Price of the goods to be manufactured must be fixed in absolute and unambiguous terms. The agreed price may be paid in lump sum or in installments in the matter mutually agreed by the parties. Providing of material required for manufacture of commodity is not the responsibility of the buyer.

Long Term Financing:

In order to meet Long term financing of infrastructure and industrial projects requirements or to expand the Business operations, following modes are available to our valued customers:

Ijarah (Leasing):

Ijarah is a contract whereby the owner of an asset, other than consumables, transfers its usufruct (benefits) to another person for an agreed period for an agreed consideration. In Ijarah/leasing, the corpus of leased commodity remains in the ownership of the lessor (Bank) and only its usufruct (benefits) is transferred to the lessee (customer). Anything which cannot be used without consuming the same cannot be leased out like money, edibles, fuel, etc. During the entire term of the ijarah, Bank being the owner of the assets retains the title of ownership and also bears all risks and rewards pertaining to ownership. All the risks related to usage of the assets are borne by the lessee (customer). Ijarah facility can be availed for financing of plant, machinery, buildings and all the other fixed assets.

Diminishing Musharaka:

Diminishing Musharaka (DM) is commonly used for financing the fixed assets. It is a form of co-ownership in which two or more persons share the ownership of a tangible asset in an agreed proportion and one of the co-owners undertakes to buy in periodic installments the proportionate share of the other co-owner until the title to such tangible asset is completely transferred to the purchasing co-owner. Diminishing Musharaka can be created only in tangible assets. It shall be limited to the specified Asset(s) and not to the whole enterprise or business. In Diminishing Musharaka incidental expenses related to ownership may be borne jointly by the co-owners in the proportion of their co-ownership. Loss, if any, shall be borne by the co-owners in the proportion of their respective investments. The amount of periodic payment would go on decreasing with purchase of ownership units by the purchasing co-owner.