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| Financing Products Scheme |
| Financing Products Scheme of NBP Aitemaad - Islamic Banking are as follows |
Corporate / Commercial / SME / Agri
Aitemaad Ijarah
Aitemaad Murabaha
Aitemaad Diminishing Musharakah
Aitemaad Salam
Aitemaad Istisna
Aitemaad Running Musharakah
Aitemaad Musawamah
Aitemaad Tijarat |
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| Aitemaad Ijarah |
Ijarah means "to give something on rent". The term "IJARAH" is analogous to the English term "leasing".
Firstly the Bank will purchase the Assets as required by the Customer and subsequently the assets will be leased to the Customer on the terms and conditions as agreed with him.
| Ijarah Facility will be offered for the following assets |
- Vehicles (both Commercial and Private)
- Office Equipment
- Plant and Machinery
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| Aitemaad Murabaha |
Murabaha may be defined as a contract between a Buyer and Seller under which the Seller discloses to the Buyer the cost of goods being sold and adds an agreed profit. Price is payable on spot or at a certain future date, in lump sum or in installments (deferred payments).
Under the MURABAHA FACILITY, the Bank will first purchase the required goods directly or through an Agent. All costs incurred on such purchases will be borne by the Bank.
Subsequently the Bank will sell the goods to the Customer on deferred payment basis (30 days to one year) at an agreed price comprising cost of goods purchased and Bank's profit.
On due date, the Customer will pay to the Bank the agreed price, in lump sum or as per the agreed installment schedule. |
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| Aitemaad Diminishing Musharakah |
Diminishing Musharakah (DM) is a Shariah compliant concept, wherein the Bank and its Customer enter in a joint ownership of an asset. The Bank after establishing this partnership leases out its portion/share to the Customer at a rent agreed upon using a benchmark through a separate Rental Payment Agreement. Further, the Customer also agrees to purchase the share of the Bank in units at periodical intervals. For this purpose, the share of the Bank is divided into units. The Customer over an agreed tenure purchases all the units of the Bank's share through independent sale contract ultimately taking the complete ownership of the said asset.
| DM can be used in following avenues |
- Construction of building
- Acquisition of fixed assets
- Purchase of plants, Machineries and Equipment
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| Aitemaad Salam |
Aitemaad Salam is designed for Corporate / Commercial / SME / Agri Customers based on 'Salam with wakalah'. This product will cater the needs of farmers and merchants who need working capital for their business enterprises at different levels that are involved in agriculture and industrial production or trade etc.
| Definition of Salam |
A Salam transaction is the purchase of a commodity for deferred delivery in exchange for full advance payment at the time of Salam contract. It is a type of sale in which the price, known as the Salam capital, is paid at the time of contracting while the delivery of the item to be sold, known as Al-Muslamfihi (the subject-matter of a Salam contract), is deferred. The Customer (seller) and the Bank (buyer) are known as Al-Muslamilaihi and Al-Muslim or Rabbul-Salam respectively. Salam is also known as salaf (borrowing). |
| Basic steps of this product are as follows |
- Bank purchases goods at discounted price from Customer and must makes payment 100% full and in advance at the time of Salam contract.
- The Customer provides the fungible goods and delivers to the Bank at the pre-agreed date.
- Once the goods are delivered by the Customer to the Bank, the Bank appoints the Customer as an agent for selling the goods to the third party (ultimate buyer) at target sale price on spot or credit basis and collects the sale proceeds in a specified number of days.
- After completion of sale, the agent will notify to Bank that goods have been sold to third party (ultimate buyer) at target sale price on spot or credit basis.
- Afterwards, sale proceeds shall be deposited into Customer's account maintained with the Bank as per the payment terms, Bank will debit the minimum selling price (Contract Price + Profit + Agency Fee + Other transaction costs - Incentive) from Customer's account whereas the remaining amount shall be given as Incentive Fee and Agency Fee to the Customer.
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| Aitemaad Salam can be used for financing of |
| Every item / unit which one homogenous in nature and can be identified through specification. |
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| Aitemaad Istisna |
Aitemaad Istisna is designed for Corporate / Commercial / SME / Agri Customers based on 'Istisna with wakalah' where production and value adding activities are involved.
| Definition of Istisna |
Istisna is a contract of sale of specified items to be manufactured or constructed, with an obligation on the part of the manufacturer or builder (contractor) to deliver them to the Customer upon completion. Istisna is one of the two sale contracts where exception to the rules of existence of subject matter at the time of sale is allowed, as existence of subject matter is not necessary in Istisna Contract. It can be executed on the goods that require manufacturing.
It is necessary for the validity of Istisna that the price is fixed with the consent of the parties and that the necessary specifications of the goods to be manufactured or constructed are pre-agreed between them. The Istisna price can either be paid in advance, or in installments or at the time of delivery of goods. |
| Basic steps of this product are as follows |
- Bank purchases goods at discounted price from Customer and makes payment either in advance, in installments, at the time of delivery of goods or at any agreed payment schedule.
- The Customer manufactures or constructs the goods and delivers to the Bank at the pre-agreed date.
- Once the goods are delivered by the Customer to the Bank, the Bank appoints the Customer as an agent for selling the goods to the third party (ultimate buyer) at target sale price on spot or credit basis and collects the sale proceeds in a specified number of days.
- After completion of sale, the agent will notify to Bank that goods have been sold to third party (ultimate buyer) at target sale price on spot or credit basis.
- Afterwards, sale proceeds shall be deposited into Customer's account maintained with the Bank as per the payment terms, Bank will debit the minimum selling price (Contract Price + Profit + Agency Fee + Other transaction costs - Incentive) from Customer's account whereas the remaining amount shall be given as Incentive Fee and Agency Fee to the Customer.
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| Aitemaad Istisna can be used for financing of |
| Cement Manufacturing, Sugar Manufacturing, Rice Packaging, Flour, Steel Items, Making of Fertilizers, Manufacturing of Garments etc. |
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| Aitemaad Running Musharakah |
Aitemaad Running Musharakah is based on Musharakah under Shirkat-ul-Aqd whereby parties to the contract mix their capital to earn profit of a commercial venture or activity. Under Musharakah (based on Shirkat-ul-Aqd), customers can utilize Musharakah financing to meet their cash operating cycle days on daily need basis and thus will pay profit to Bank on daily product basis (i.e. outstanding day end balances). Under this product, Bank will invest in the identified primary revenue generating activities (Operating activities) of the Customer’s business thereby resulting in a Musharakah (i.e. profit and loss sharing arrangement) between Bank and Customer. Profit / Loss, incurred on Gross Level (after some adjustment of other direct costs of Musharakah and relevant expenses), will be shared by the Bank and the Customer as per respective investment ratio.
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| Aitemaad Musawamah |
Musawamah is a type of sale in which buyer and seller negotiate the selling price of an item without any stipulation in the contract to charge a specific amount of profit by the seller. The buyer may or may not have the knowledge about the cost of the item under negotiation.
Musawamah facility can be used quite easily to facilitate financing requirements of trade and industry both in short term and long term:
1) Working Capital / Agricultural Financing
Musawamah may be used for working capital needs such as the purchase of raw material for manufacturing concerns.
2) Trade Finance
Musawamah may be used to finance exports for the benefit of the industry.
3) Corporate Financing
Musawamah may be used for corporate financing such as construction material for building a warehouse, factory, offices, etc.
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| Aitemaad Tijarat |
Aitemaad Tijarat is designed for Corporate / Commercial / SME / Agri Customers based on 'Musawamah with wakalah' for purchase and sale of 'finished goods' according to an agreed upon specifications.
Aitemaad Tijarat is a sale (Musawamah) and wakalah (agency) based financing facility for Customers. The facility will enable the Customers to sell their finished goods stock, meet their working capital requirements and enjoy the benefits of cash sales. Under this concept, the Bank will purchase the finished goods of the Customers on cash (Musawamah) and after taking delivery of finished goods, the Bank will appoint the Customer as its agent to sell the same goods in the market generally on credit basis (Wakalah).
It is necessary for the validity of Aitemaad Tijarat transaction that the price is fixed with the consent of the Bank and Customer and that the necessary specification of the required items is fully agreed between them. The price of finished goods under Aitemaad Tijarat can be paid on spot or in installment with immediate delivery of goods.
| Basic steps of this product are as follows |
- Bank purchases 'finished goods' at discounted price from Customer and makes payment either in advance, in installments, at the time of delivery of goods or at any agreed payment schedule.
- The Customer delivers 'finished goods' to the Bank at the pre-agreed date (usually on spot).
- Once the finished goods are delivered by the Customer to the Bank, the Bank appoints the Customer as an agent for selling the finished goods to the third party (ultimate buyer) at target sale price on spot or credit basis and collects the sale proceeds in a specified number of days.
- After completion of sale, the agent will notify to Bank that goods have been sold to third party (ultimate buyer) at target sale price on spot or credit basis.
- Afterwards, sale proceeds shall be deposited into Customer's account maintained with the Bank as per the payment terms, Bank will debit the minimum selling price (Contract Price + Profit + Agency Fee + Other transaction costs - Incentive) from Customer’s account whereas the remaining amount shall be given as Incentive Fee and Agency Fee to the Customer.
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| Aitemaad Tijarat can be used for financing of |
| Cement, Sugar, Rice, Flour, Steel Items, Fertilizers, Garments etc. |
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