The OLC-i can be issued under 3 contracts:
Wakalah refers to a contract where a party authorises another party to act on behalf.
Benefits
- Ensures buyer receive merchandise on time
- Payment made upon receipt of complied documents
Features
- The client pays in advance the OLC-i value (100% deposit)
- Undertaking of payment by BMMB
- BMMB acts as an agent of the client. There is no financing from BMMB
Documents Required
The following documents are required for issuing Wakalah Outward Letter of Credit-i are:
- Completed and signed Documentary Credit Application Form
- Proforma Invoice / Purchase Order
- Insurance / Takaful Certificate / Policy (where applicable)
Murabahah refers to the sale of good at a price, which includes cost- plus profit as agreed by both seller and the buyer. This is a contract where the commodity exchanged for is delivered immediately and the price is paid in lump sum at a later date.
Benefits
- Purchase goods on credit and enjoy the cash price from the supplier
- Obtain financing from the Bank;
- Pays the bank on deferred term;
- Rebate may be given on early settlement.
Features
- Undertaking to pay by the Bank;
- The Bank appoints the customer as purchasing agent;
- Upon arrival of the complied documents, the Bank pays the negotiating bank by utilizing its own funds;
- The bank sells the goods to the customer (purchasing agent) at a selling price comprising its cost and profit margin.
Settlement by customer on deferred payment; - Bank provides financing.
Documents Required
The following documents are required for issuing Murabahah Outward Letter of Credit-i are:
- Completed and signed Documentary Credit Application Form
- Signed Letter of Hypothecation
- Signed Documentary Credit Murabahah Contract Note
- Signed Bill of Exchange or Signed Accepted Bills-i Draft
- Proforma Invoice / Purchase Order
- Insurance / Takaful Certificate / Policy (where applicable)
