Common use of Method of Financing Clause in Contracts

Method of Financing. Under the arrangement of Tawarruq and the Bank’s financing procedure, the arrangement is concluded in the following manner:- 2.1 Purchase of the Commodities by the Bank. (i) In accordance with the Shariah principle of Tawarruq and the Bank’s Islamic financing facilities procedures, the Customer will issue the Purchase Requisition to purchase the Commodities from the Bank at the Selling Price; (ii) Upon receipt by the Bank of the Purchase Requisition from the Customer, the Bank will purchase the Commodities from a Commodity Trader at the cost price of the Commodities payable on cash basis which shall be an amount equivalent to the Purchase Price; (iii) The Commodity Trader will deliver the Commodities evidenced by a certificate together with the delivery order as evidence for the transfer of ownership to the Bank; 2.2 Purchase of the Commodities by the Customer from the Bank Pursuant to the Agency Agreement under which the Customer appoints the Bank as its agent to purchase the Commodities on his/her behalf from the Bank on terms and conditions contained in Section 2.3 below, the Bank and the Customer will execute the Murabahah Sale Contract at the Selling Price based on the Murabahah concept (cost plus profit) which will be payable by the Customer to the Bank by way of instalment or deferred payment or any other manner as prescribed by the Bank;