Guidelines for Islamic Modes of Finance, SBP

Rupees only is not paid when due or becomes due or

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___________________________ (Rupees ______________________________ only) is not paid when due or becomes due or capable of being declared due prior to its stated maturity; 9.02 Notwithstanding anything contained herein, the Institution may without prejudice to any of its other rights, at any time after the happening of an Event of Default by notice to the Client declare that entire amount by which the Client is indebted to the Institution shall forthwith become due and payable. 10. PENALTY 10.1. Where any amount is required to be paid by the Client under the Principal Documents on a specified date and is not paid by that date, or an extension thereof, permitted by the Institution without any increase in the Contract Price, the Client hereby undertakes to pay directly to the Charity Fund, constituted by the Institution, a sum calculated @ ------% per annum for the entire period of default, calculated on the total amount of the obligations remaining un-discharged. The Charity Fund shall be used at the absolute discretion of the Institution, exclusively for the purposes of approved charity. 10.2. In case (i) any amount(s) referred to in clause 10.01 above, including the amount undertaken to be paid directly to the Charity Fund, by the Client, is not paid by him, or (ii) the Client delays the payment of any amount due under the Principal Documents and/ or the payment of amount to the Charity Fund file:///C|/Documents and Settings/Administrator/D...uidelines for Islamic Modes by SBP/murabaha 1.htm (8 of 10) [2/23/2008 11:45:37 PM]
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State Bank of Pakistan - The Central Bank as envisaged under Clause 10.01 above, as a result of which any direct or indirect costs are incurred by the Institution, the Institution shall have the right to approach a competent Court (i) for recovery of any amounts remaining unpaid as well as (ii) for imposing of a penalty on the Client. In this regard the Client is aware and acknowledges that notwithstanding the amount paid by the Client to the Charity Fund of the Institution, the Court has the power to impose penalty, at its discretion, and from the amount of such penalty, a smaller or bigger part, depending upon the circumstances, can be awarded as solatium to the Institution, determined on the basis of direct and indirect costs incurred, other than the opportunity cost. 11. INDEMNITIES The Client shall indemnify the Institution against any expense which the Institution shall prove as rightly incurred by it as a consequence of (a) the occurrence of any Event of Default, (b) the purchase and sale of Goods or any part thereof by the Client or the ownership thereof, and (c) any mis-representation. 12. SET-OFF The Client authorizes the Institution to apply any credit balance to which the Client is entitled or any amount which is payable by the Institution to the Client at any time in or towards partial or total satisfaction of any sum which may be due or payable from the Client to the Institution under this Agreement.
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