Cost Plus (Murabahah) Import Finance


Cost Plus (Murabahah) Import Finance is created for customers who are engaged in the business of importation. Under this mode of finance, the Bank issues a Letter of Credit (LC) in favor of a beneficiary (exporter) upon the prompting of the applicant customer (ultimate importer). The Bank commits and accepts to pay against trade documents drawn in compliance with the Letter of Credit terms.

Goods are thus first bought by the Bank for its account, on the orders of the customer, by paying cash or through Letter of Credit. Upon receipt of the shipping documents by the Bank (which serves as constructive ownership), the goods are sold to the customer with a profit margin on deferred payment basis which is disclosed to the customer. Payment, on a deferred basis, can be made to the Bank in installments or in a lump sum as agreed by both parties.

This facility can be utilized for the purchase of raw materials, finished goods, equipment, machineries and other consumables from local or international markets.