Guidelines for Islamic Modes of Finance, SBP

Vi if goods manufactured conform to the

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vi) If goods manufactured conform to the specifications agreed between the parties, the orderer (purchaser) cannot decline to accept them except if there is an obvious defect in such goods. However, the agreement can stipulate that if the delivery is not made within the mutually agreed time period, then the buyer can refuse to accept the goods. vii) The bank (buyer in Istisna) can enter into a Parallel Istisna contract without any condition or linkage with the original Istisna contract. In one of them, the bank will be the buyer and in the second the seller. Each of the two contracts shall be independent of the other. They cannot be tied up in a manner that the rights and obligations of one contract are dependant on the rights and obligations of the parallel contract. Further, Parallel Istisna is allowed with a third party only. viii) In Istisna transactions the buyer shall not, before taking possession (actual or constructive) of the goods sell or transfer ownership in the goods to any other person. ix) If the seller fails to deliver the goods within the stipulated period, the price of the commodity can be reduced by a specified amount per day as per the agreement. x) The agreement can provide for payment for penalty calculated at the agreed rate in percent per day/annum that shall be used for the purposes of charity. The banks can also approach competent courts for award of solatium, at discretion of the courts, which shall be determined on the basis of direct and indirect costs incurred, other than opportunity cost. Also, security or collateral can be sold by the bank (purchaser) without intervention of the court. xi) In case of default by the client, the banks can also approach competent courts for award of damages, at discretion of the courts, which shall be determined on the basis of direct and indirect costs incurred, other than opportunity cost. © 2003 State Bank of Pakistan. All Rights Reserved. Disclaimer | Instructions State Bank of Pakistan I.I. Chundrigar Road, Karachi, Pakistan. Phone: (+9221-24450298, Fax: (+9221) 9212440 and Settings/Administrator/Des...s by SBP/Essentials of Islamic modes of finance.htm (6 of 6) [2/23/2008 11:33:38 PM]
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State Bank of Pakistan - The Central Bank Home Jobs & Careers Site Map Feedback Contact Us Help Desks Press Release April 15, 2005 State Bank s Shariah Board Approves Essentials and Model Agreements for Islamic Modes of Financing BACK Essentials of Islamic Modes of Financing Murabaha Facility Agreement Musawamah Facility Agreement Lease Agreement Salam Agreement Musharaka Investment Agreement Istisna Agreement Agreement for Interest free Loan Mudaraba Financing Agreement Syndication Mudaraba Agreement In the Name of Allah, the Merciful, the Compassionate Model Murabaha Facility Agreement (For Corporate Clients-local purchases) Murabaha Document # 1 | Murabaha Doc # 1 | Murabaha Doc # 2 | Murabaha Doc # 3.1 | Murabaha Doc # 3.2 | | Murabaha Doc # 4 | Murabaha Doc #5 | Murabaha Doc #6 | Murabaha Doc # 7 | THIS MURABAHA FACILITY AGREEMENT (this "Agreement") is made at_____on ___ day of _____ by and BETWEEN
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