Murabaha means a sale of goods by a person to another under an arrangement whereby the seller is obliged to disclose to the buyer the cost of goods sold either on cash basis or deferred payment basis and a margin of profit included in the sale price of goods agreed to be sold.

Musawamah is a general kind of sale in which price of the commodity to be traded is stipulated between seller and the buyer without any reference to the price paid or cost incurred by the former. Thus it is different from Murabaha in respect of pricing formula. Unlike Murabaha, seller in Musawamah is not obliged to reveal his cost.

Ijarah is a contract whereby the owner of an asset, other than consumables, transfers its usufruct to another person, for an agreed period, for an agreed consideration. In Ijarah, the corpus of the leased asset remains in the ownership of the lessor and only its usufruct is transferred to the lessee.

Salam (advance payment against deferred delivery of goods) means a kind of sale whereby the seller undertakes to supply specific goods (Al-Muslam Fihi) to a buyer at a future date in consideration of a price fully paid in advance at the time the contract of sale is made. Salam can be effected in respect of ‘Dhawatul-Amthal’ which represent such commodities, the units of which are homogenous in characteristics and are traded by counting, measuring or weighing according to usage and customs of trade.

Diminishing Musharakah is a form of co-ownership in which two or more persons share the ownership of a tangible asset in an agreed proportion and one of the co-owners undertakes to buy in periodic installments the proportionate share of the other co-owner until the title to such tangible asset is completely transferred to the purchasing co-owner. Diminishing Musharakah can be created only in tangible assets. Diminishing Musharakah shall be limited to the specified asset(s) and not to the whole enterprise or business.

The Bank and customer enter into Musharakah, based on Shirkat-ul-Aqd, wherein:
(a)the Bank and the customer invest in the identified primary Operating Activities (or any identifiable segment thereof) of the customer’s business.
(b) Participate in the profits / (loss) generated by the Musharakah as per the agreed Profit Sharing Ratio (PSR) / proportion to their respective Investment ratio.

Istisna is a mode of sale, at an agreed price, whereby the buyer places an order to manufacture, assemble or construct, or cause so to do anything to be delivered at a future date. The commodity must be known and specified to the extent of removing any ambiguity regarding its specifications including kind, type, quality and quantity etc.

Askari Islamic Finished Goods financing is a (Musawamah) Sale & Agency based financing facility. The facility offers short to medium term working capital financing facility to Local/ Export based customers involved in manufacturing and/ or trading of finished goods.

AKBL-IBSD may open Letter of Credits (LC) in following ways:

• Sight LCs under Master Murabaha Facility Agreement (MMFA)/Agency Agreement
• Usance LCs without MMFA/Agency Agreement
• Usance LCs Under MMFA/Agency Agreement

AKBL-IBSD may open Letter of Credits (LC) in following ways:

• Bid Bond
• Performance Bond
• Advance Payment Guarantee
• Retention Money Guarantee
• Maintenance Guarantee
• Payment Guarantee
• Financial Guarantee
• Shipping Guarantee