(1 - 1) General Provisions of Murabaha

Source:

Dallah AlBaraka Group, Resolutions & Recommendations of Al- Baraka Symposia on the Islamic Economy, Al-Barakah First Symposium, fatwa (No. 8).

Question (2):

Kuwaiti Finance House had ordered goods in its name from an exporter.

The exporter shipped the goods in the name of the client (purchase orderer) and not in the name of Kuwaiti Finance House. What action can be done? Do we accept the process or reject it?

Answer:

It is not permissible since goods must be in the name of the Kuwait Finance House, otherwise the whole transaction will become a mere financing transaction which is wrong?.

This error can be corrected by canceling all issued contracts or procedures entered between the client and the exporter.

Then a new transaction shall start between the exporter and the financier while taking the necessary precautions in the future to avoid such conduct.

Source:

Kuwait finance House, Book of Fatwas in economic issues, part 1 and 2, Fatwa No. (69).

Question (3):

To what extent does the bank accept the execution of new Murabaha transaction for a local client who previously filed a request for the implementation of local Murabaha transaction To what extent does the bank accept the execution of new Murabaha transaction for a local client who previously filed a request for the implementation of local Murabaha transaction

Answer:

The board opines that this matter is related to the management and its keenness to deal with entrusted clients.

Source:

Fatwas of the Shari'ah Board of Qatar Islamic Bank, Fatwa No. (41).

Question (4):

What are the necessary controls and procedures to show the basic role of the bank in Murabaha operations?

Answer:

First: It is necessary that the bank, when applying Murabaha sales to a purchase orderer abides by the controls that mark the main role of the bank in the transaction and avoids putting First: It is necessary that the bank, when applying Murabaha sales to a purchase orderer abides by the controls that mark the main role of the bank in the transaction and avoids putting

1. The bank undertakes to purchase the commodity by itself, or

2. Through an agent other than the purchase orderer.

3. The bank has to pay directly the price to the seller without mediation of the purchase orderer.

4. The bank should receive the commodity to be, under its custody.

5. Attach the documents that prove that the bank has purchased and received the commodity.

Second: To observe such controls, attention and care should be paid to those who apply Murabaha transactions. Therefore the Committee confirmed the second recommendation of the resolution No (80/7/D8) issued by Jeddah Islamic Figh Academy, which reads: " Islamic banks should qualify their officials and employees and provide them with experts well Second: To observe such controls, attention and care should be paid to those who apply Murabaha transactions. Therefore the Committee confirmed the second recommendation of the resolution No (80/7/D8) issued by Jeddah Islamic Figh Academy, which reads: " Islamic banks should qualify their officials and employees and provide them with experts well

Source:

Dallah Al-Baraka Group, Development and research Department, Resolutions and Recommendations of Al-Baraka symposia on

Islamic Economy, 9 th symposia, fatwa No. (8).

(1 – 4) Timing of Murabaha Contract Question:

Please provide us with Shariah opinion for the attached form "Appendix of Sale Contract for the Purchase orderer", particularly with respect to the following:

Is it permissible to set a period of time for the Murabaha sale contract made with the Purchase orderer (the client) whereby a ceiling is set for (provisions) through this ceiling (provisions) the client may conclude several transactions with the bank against sufficient guarantees. The proposed amendments are:

First: Article No. (): "The term of this contract is renewable as per the approval of the first party."

Second: Article No. (): "The first party has the right to amend all its applied transactions conditions (Murabaha ratios, commissions, the currency difference, mailing fees…etc.), without recourse to the Second party and / or the third Party,

It may only notify the Second and / or third party of any change made to those conditions?

Answer:

Regarding clarification on amendments made by the board of directors to the terms of Murabaha contract, concerning setting time for a Murabaha contract, it seems to me that this contract is a partnership on a trading matter in accordance with an agreement between the two parties. However, Jurists have differed over permissibility of determining a specific time for the contract of partnership or Mudharaba, for example five years. Some of them permit it while others prohibit it. Nevertheless, the permissibility of timing of partnership has been confirmed in Fatawa Al-Khaniyah as well as it has been mentioned in Maajam Al-Hanablah that it is permissible to set a time for Mudharabah while it is prohibited by others.

The Jordanian civil law is guided by views of jurists who permitted timing of both partnerships and Mudharabah; as reflected in articles (601), (631).

In view of the above mentioned facts I opine that timing of Murabaha contract is permissible as agreed by the two parties, if the bank's interest necessitates so.

Source:

Jordan Islamic Bank for Finance and Investment, Book of Fatwas, parts (1), (2), Fatwa No. (9).

(1-5) General Terms of Murabaha Transaction for the