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The Principles and Practices of Shariah in Islamic Finance - page 39 / 49





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Benchmarking the Murabahah sale price to a certain benchmark

Modification of contract terms during Wa d stage

  • ncorporation of contract details in Murabahah contract

Payment obligation

Liability of the payment after the demise of

the purchase orderer

Compensation/ penalty clause for a customer who defaulted


  • 77.

    During the Wa’d stage, determination of mark-up in a Murabahah sale price may be based on a benchmark such as the BLR.

  • 78.

    Amendments to the terms of the binding promise shall not be permitted without the consent of the other party.

  • 79.

    During the Wa d stage prior to executing the Murabahah contract, the IFI and the purchase orderer may mutually agree to modify the terms, for example the maturity date of payment or a new mark-up as well as to change from Murabahah contract to other financial transactions.

  • 80.

    At the time of Murabahah contract execution, details of the transaction shall be incorporated and documented even though these specifications were already stipulated during the Wad stage.

Event of Default and Recovery of Murabahah Financing

  • 81.

    The customer shall ensure timely and prompt payment of the Murabahah financing as per the payment schedule agreed with the IFI.

  • 82.

    The outstanding liability after the demise of the customer may be waived by the IFI. In cases where the waiver is not given, the IFI may claim the outstanding debt from the estate of the deceased.

83.The IFI may include a clause in the Murabahah contract, stipulating a “compensation for late payment” as determined by the relevant authorities, which is claimable by the IFI from the customer as income. Alternatively, the IFI may include a clause stipulating late payment penalty which shall be channelled to charity. The IFI may also require the customer to prove any claim of non-delinquent insolvency in order to be exempted from penalty.

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