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).

Total Fatwas : 82
No. Title
1 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
2 Can the Guarantor Charge for the Guarantee?
3 LCs: Partial Coverage
4 Letter of Credit
5 Obtaining LCs Without Adequate Funds
6 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?
7 Should the Bank’s Fee for an LC Opened for an Estimated Sum Be Based on the Estimated or Actual Value?
8 Taking Commission On Issuance and/or Confirmation Of LCs
9 The Bank Charges a Fee for an LC as Compensation for Missing out on the Difference in Currency Exchange Rates
10 Is an Exporter’s Acknowledgement of the Opening of the LC Qabd? Can the Goods Then be Resold?

 

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