Bai-Muajjal

Bai-Muajjal is a contract between the Bank and the client (Seller and Buyer) under which the Bank (Seller) sells to the client (Buyer) certain specified goods (permissible under Shariah and Law of the country), purchased as per order and specification of the client at an agreed price payable within a fixed future date in lump-sum or by fixed installments.

 Bank categorizes Bai-Muajjal as following:

1. Bai-Muajjal Commercial: Investment for purchase and sale of goods to individual or Firm or Company for Trading purpose shall be termed as Bai-Muajjal Commercial.

2. Bai-Muajjal Industrial: Investment to Industrial undertaking in the form of supply of Machineries, Equipments, Raw Materials etc, will be termed as Bai-Muajjal Industrial.

3. Bai-Muajjal Agricultural: Investment to agriculture sector for supply of seeds, fertilizer etc, shall be termed as Bai-Muajjal Agriculture.

4. Bai-Muajjal Import: Investment for Import of goods from abroad shall be termed as Bai-Muajjal Import.

5. Bai-Muajjal … Scheme: Investment under any specific Scheme shall be termed as Bai-Muajjal... Scheme etc.

Important features

01.

Bank is not bound to declare cost of goods and profit mark-up separately to the client.

02.

Spot delivery of the item and payment is deferred.

03.

Ownership and possession of the goods is transferred by the Bank to the client before receipt of sale price.

04.

Client may offer an order to purchase by the Bank any specified goods and committing himself to buy the same from the Bank on Bai-Muajjal mode.

05.

It is permissible to make the promise binding upon the client to purchase from the Bank. That is, he is to either satisfy the promise or to indemnify the damages caused by breaking the promise.

06.

Cash/Collateral Security should be obtained to guarantee the implementation of the promise or to indemnify the damages.

07.

Mortgage/Guarantee/Cash Security may be obtained before/at the time of signing the agreement.

08.

Stock and availability of goods is a pre-condition for Bai-Muajjal agreement. The responsibility of the bank is to purchase the desired goods at the disposal of the client to acquire ownership of the same before signing the Bai-Muajjal Agreement with the client.

09.

The Bank after purchase of goods must bear the risk of goods until those are actually delivered to the client.

10.

The Bank must deliver the specified goods to the client on specified date and at specified place of delivery as per contract.

11.

The Bank may sell the goods at one agreed price which will include both the cost price and the profit.

12.

The price once fixed as per agreement and deferred can not be further increased.