Letter of Credit

Islmic Letter of Credit (ILC) is a written undertaking given by the Islamic bank, to the seller (the beneficiary) at the request and on the instructions of the buyer (the applicant), to pay at sight or at a determinable future date, a stated sum of money within a prescribed time limit and against stipulated documents which must comply with terms and conditions. An Islamic bank may offer ILC under several shari'ah contract, namely wakalah (agency), murabahah (cost-plus profit) and musharakah (partnership).


The Purchaser Opens an LC for Delayed Payment in a Foreign Currency; the Bank Gives a Better Rate for Holding the Money till the Payment
Can the Guarantor Charge for the Guarantee?
LCs: Partial Coverage
Letter of Credit
Obtaining LCs Without Adequate Funds
Should an Islamic Bank Refuse to Open a Letter of Credit for a Buyer Who Is Planning to Resell the Purchased Commodity to the Government at a Huge Mark-up?
Should the Bank’s Fee for an LC Opened for an Estimated Sum Be Based on the Estimated or Actual Value?
Taking Commission On Issuance and/or Confirmation Of LCs
The Bank Charges a Fee for an LC as Compensation for Missing out on the Difference in Currency Exchange Rates
Is an Exporter’s Acknowledgement of the Opening of the LC Qabd? Can the Goods Then be Resold?
Is It Permissible for KFH to Open a Letter of Credit to Import Women’s Clothes That May Not Be Modest?
Is It Permissible for KFH to Deduct Expenses from the Customers’ Accounts After the Value of Goods Has Been Already Assessed in Murabahah Letters of Credit?
Is an Application for Documentary Credit That Lacks Detail Valid?
Who Has the Right to Profits Earned on Investment of Funds Sequestered to Secure an LC?
A Correspondent Bank Wants to Charge the Islamic Bank a Fee for Its Part in Issuing a Letter of Guarantee. Can the Islamic Bank Tell It to Charge the Customer?
Is It Permissible in a Murabahah Contract to Add a Condition That KFH Shall Not Pay the Producer the Price for the Goods Until After They Have Been Tested and Approved?
Would KFH Be Held Responsible in Case the Shipping Company Acknowledged That the Goods Were Sound But Then Failed to Make the Delivery?
A Murabahah Sale in Which the Intermediate Seller Stipulates That the Original Seller Will not Be Paid until the End Buyer Tests It
An L.C. Application Missing Details about the Goods to Be Purchased
Can an Islamic Bank Facilitate the Import of Meat That Is Not Islamically Slaughtered?
Can an Islamic Bank Sequester Funds in the Account of a Customer Who Applies to Open an L.C.?
Can the Murabahah Seller Raise the Markup if the Deal Involves Advance Payment That Will Extend the Deal’s Timeline?
Can the Seller in a Murabahah Sale Retain the Goods as Security until the Buyer Pays for Them?
Damage to or Loss of the Purchased Good
Delay In Receiving The Goods
How to Terminate a Pre-Existing Contract in Order to Effect a Murabahah Sale?
If the Goods Arrive before the Documents, and the Intermediate Seller Doesn’t Know the Actual Price, Can the Deal Be Switched to Musawamah?
Informing the Customer of LC Expenses after the Sale Contract Has Been Signed
Insurance Compensation for Damaged Goods Exceeds the Actual Loss; What to Do with the Excess?
Period Of Verification
The Buyer Guarantees the Reliability of a Fraudulent Exporter. Who Is Liable?
The Buyer Pre-Signs a Murabahah Contract and Deposits an Advance Payment before the Seller Buys the Goods
The Purchase Undertaker Requests the Intermediate Seller to Pass on Insurance Compensation for Damaged Goods
The Purchase Undertaker Wants to Avoid the Expense of a Third-Party Inspector of the Goods before Shipment
التعامل مع شركات التأمين التقليدي
Murabahah With Exporting And Importing Companies
Using Murabahah In Cigarette-Related Sales
Various Issues
When the Goods Arrive before Their Shipping Documents
When the Purchase Undertaker Is a Distribution Agent for the Exporter
If Some of the Goods Are Damaged, Must the Price Be Adjusted?
Buying a Good When the Importer Can’t Pay for It; Then Selling it to Him
Trading in Statues
The Agent Buys the Good Back from the Principal
Can an Islamic Bank Charge a Fee for Changes to the LC Made by Telex?
How Should an Amount Transferred from a Savings Account to an Insurance Account Be Considered?

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