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Typically the Bank grants a revolving trade finance facility to the client within this facility. The murabaha facility is utilized for:
1. Commercial and Residential property finance. 2. Motor vehicle finance.
3. Equipment finance 4. Trade finance
B. Determining the profit margin
Bank Muamalat Indonesia
A profit margin reference is the profit margin determined by an Islamic bank at the ALCO meeting. The profit margin required for each financing is
established on the basis of recommendations, suggestions, and proposals from an Islamic bank‟s ALCO team, by taking into account the following aspects:
1. Direct Competitor’s Market Rate DCMR
2. Indirect Competitor’s Market Rate ICMR
3. Expected Competitors Return for Investors ECRI 4. Acquiring Cost
5. Overhead Cost
Requirements for Calculating a Profit Margin A profit margin can be calculated only if the following components are
available:
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1. The type of profit margin calculation method. 2. The financing plafond according to type.
3. The profit margin rate required from financing. 4. The collection mode of receivables or the duration of receivables both the
acquiring cost and profit margin A receivable collection date is excluded in the calculation of a daily profit
margin.
Al Baraka Bank South Africa
Albaraka bank uses the “Albaraka Profit Mark-up” as its benchmark. This benchmark is reviewed quarterly by the Board Credit Committee and the decision
is communicated to all stakeholders. The benchmark does not only follow the fluctuation of the interest prime rate but will be determined by internal and
external factors affecting Albaraka bank. Some of the factors will be: 1. Laws and regulations of South Africa
2. The cash flows of Albaraka bank as well as external stakeholders. 3. The market conditions
4. Stability at Albaraka bank 5. Competition
6. Uncertain future circumstances 7. Supply and demand for funds.
8. Inflation 9. Domestic and national savings
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10. The return the bank wishes for its depositors as well for itself The responsibility of determining the benchmark is entrusted upon the
Assets and Liability committee ALCO of Albaraka Bank. The Albaraka Profit Mark-up benchmark once determined for
implementation is publicized for the benefit of internal use as well as for the public.
Clients requesting that Albaraka bank follows the prime rate will be educated on the nature of an Islamic transaction and the benefits thereof.
C. Nominating a representative or agent Wakalah
