Murabahah Import Letter of Credit Settlement Financing is a form of financing extended to trade partners/debtors/borrowers by converting the outstanding import letter of credit document's value to a Murabahah term financing for a maximum period of one year when a customer is unable to clear the L/C documents due to shortage of working capital.
It is granted to existing high value customers of the Bank having financing risk rate-1 or 2 or 3 who encounter temporary cash flow problem to settle the import L/C document value. Accrued service charge/commission/profit rate on advance account if any shall be fully paid in cash at the time of request.
Unique features of Mudarabah Import Letter of Credit Settlement Financing
- Before releasing the import L/C document, the Bank should conclude a Murabahah term financing and mortgage (if any) contracts with the applicant and make collateral registration (if any) with appropriate registrar office.
- The customer can enjoy this facility twice during a fiscal year of the Bank.
Specific Eligibility Criteria
- The customer Financing risk rate shall be grade 1 or 2 or 3.
- The Bank shall finance only import letter of credits opened at its end.
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