Tawarruq (commodity Murabaha) - Customer buys an easily saleable asset at a marked-up price, to be paid at a later date, and quickly sells the asset to raise cash.
• Tawarruq profit rate – If the client chooses to settle only the minimum of the total amount due, the Bank and the customer will enter into Murabaha transaction(s), and in this event the statement sent to the Customer shall be treated as an offer from the Bank to the Customer for the Murabaha transaction. Bank will sell certain commodities after the due date, that it owns and which maybe a share of bulk metal stock; to the customer at a cost plus profit basis (“Murabaha Selling Price”) which will be the aggregate of the Murabaha cost and the profit that the bank shall charge on the Tawarruq for each billing cycle at the Tawarruq Profit Rate (“Tawarruq Profit”). In case such sale is not objected by the Customer, within 3 days from the issue date of the statement, it will be regarded as deemed acceptance from the Customer. Post acceptance of the Customer, Bank will communicate the offer to sell to the broker and, once accepted by the broker, Bank will set-off the outstanding Murabaha Selling Price against the sale proceeds (received from the sale to the broker), and the Bank creates a receivable of Tawarruq Profit towards the customer with Tawarruq. In this sale, Bank will be messenger and facilitator (as described further in the Additional Terms and Conditions applicable across all Islamic Products). The Cardholder/Customer can check the Quantity and Type of the Commodity used in the Tawarruq Transaction(s) from MAI website.
• If the Cardholder pays the full outstanding balance on or before the due date, no Tawarruq shall take place, in which event the statement sent to the Customer shall not be considered as an offer from the Bank to the Customer for the Murabaha transaction.