Purchase Orderer:

Purchase Orderer:

Resolution:

Having taken cognizance of the papers presented by members and experts in the subject of Murabaha Sale for purchase Orderer and after listening to discussions about the subject, it has been decided that:

First: Murabaha sale by Purchase Orderer is permissible on goods already in the physical possession of the seller, as required by Shariah, provided the seller carries the risk of loss before delivery or the consequences of returning the purchased goods because of unseen defects or any other reasons justifying the return of the goods after their reception, provided the conditions of the sale are met and with the absence of any impediments. Having noticed that the major part of the activities of many Islamic banks was geared to First: Murabaha sale by Purchase Orderer is permissible on goods already in the physical possession of the seller, as required by Shariah, provided the seller carries the risk of loss before delivery or the consequences of returning the purchased goods because of unseen defects or any other reasons justifying the return of the goods after their reception, provided the conditions of the sale are met and with the absence of any impediments. Having noticed that the major part of the activities of many Islamic banks was geared to

1- The activities of the Islamic banks shall be extended to cover all the development mechanism of the economy particularly by sponsoring industrial and commercial projects, through individual initiatives or equity participation or Mudharabah with other partners.

2- The practical aspects of Murabha on purchase orderer to be studied by Islamic banks with the aim of working out the basis for safeguarding against any pitfall in the process of application and to help observing general Shariah rules as well as those governing operations of Murabha for orderer of purchase.

Source:

Organization of Islamic Conference (OIC), Resolutions and Recommendations of the Council of the Islamic Figh Academy, First, Second and Fifth Sessions, Resolution No. (23).

(1–6) Amending the Articles of Murabaha contracts Question:

Provide Shariah opinion regarding the attached form "Appendix of

a contract of sale for the orderer of Purchase ", especially with regard to the following issue:

Is it permissible for the bank to apply the attached form which states the bank's right to unilaterally apply any modifications or changes to the current terms and conditions of transaction, such as (Murabaha rating, commissions, differences in currency, mail fees … etc.), without recourse to the client (the other party to the contract), and informing the client only?

The proposed amendment:

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

Second: Article No. (): "The first party is entitled to amend all its conditions applicable thereto (Murabaha ratios, commissions, the currency difference, mailing Second: Article No. (): "The first party is entitled to amend all its conditions applicable thereto (Murabaha ratios, commissions, the currency difference, mailing

As for the clarification on the amendments made by the board of directors for the terms of Murabaha contract, which includes Murabaha ratio, commissions … etc as of 1/1/1981.

Regarding the Shariah opinion for the stated subject as per the attached form: This matter is in connection with the profit of the transaction and scholars unanimously agree on the necessity of defining and specifying the capital and the determination of the profit at contracting besides the seller and buyer should be equally informed to avoid conflict, as can be drawn from the Fiqh books such as: "Al-Moghani" (Ibn Godamah) and "Rad Al-Muhtar" and other great Figh books. Thus, if it is meant to change those rates in the future contracts and the purchase orderer agrees to them, then no objection for that, yet if it is intended, to amend the contracts that have been previously made as well as to change what had been willingly and mutually agreed upon then this is not permissible Regarding the Shariah opinion for the stated subject as per the attached form: This matter is in connection with the profit of the transaction and scholars unanimously agree on the necessity of defining and specifying the capital and the determination of the profit at contracting besides the seller and buyer should be equally informed to avoid conflict, as can be drawn from the Fiqh books such as: "Al-Moghani" (Ibn Godamah) and "Rad Al-Muhtar" and other great Figh books. Thus, if it is meant to change those rates in the future contracts and the purchase orderer agrees to them, then no objection for that, yet if it is intended, to amend the contracts that have been previously made as well as to change what had been willingly and mutually agreed upon then this is not permissible

Therefore I do not agree with the second article of the sent form.

Source:

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

(1-7) Actions and agreements associated with a contract Question (1):

If a client approaches Kuwait Finance House to deal with it on the basis of Murabaha, the Kuwait Finance House would buy commodities from a seller abroad. After having possessed those commodities, it would resell them to the said client. The client demands Kuwait Finance House to buy the foreign currency from it when the Kuwait Finance House pays the price of goods to the seller when the foreign exchange rate is suitable to the Kuwait Finance House compared to the market rates at that time.

Is it permissible for Kuwait Finance House to carry out such a transaction from Shari'ah perspective?

Answer:

If the goods sale contract is independent from the currency purchase agreement with the client, and both contracts are entirely independent, then, there would be no objection from Shari'ah point of view.

Source:

Kuwait Finance House, Book of Fatwas on economic Issues, parts (1), and (2), Fatwa No. (84).

Question (2):

In the event that the international Murabaha transaction is bound by Kuwaiti Dinar, the investment department would demand approval and acknowledgement letters from the agent and the buyer stating that the transaction shall be registered in the Dinar currency at the rate prevailing on the day of purchase from the exporter. In cases where the purchaser records are maintained in a currency other than the Dinar (e.g. Sterling), the purchaser would demand that the sale invoices be recorded in his own currency (Sterling) against the Kuwaiti Dinar . Is this permissible?

Answer:

It is permissible to conduct "Murabaha" transaction in Dollar and then convert the Dollar to Dinar at the exchange rate of the Dollar or others prevailing on the day of purchase from the exporter.

Source:

Kuwait Finance House, Book of Fatwas on Economic issues, parts (1), and (2), Fatwa No. (158).

(2)

Provisions of Foreign Exchange in International Murabaha