Musawamah is a general kind of sale in which the price of the commodity to be traded is stipulated between the seller and the buyer without any reference to the price paid or cost incurred by the former. Thus, it is different from Murabaha in its pricing formula. Unlike Murabaha, the seller in Musawamah is not obliged to reveal his cost. The pricing is based on either a fixed or floating profit rate, with terms that can be adjusted according to market conditions. Suitable for corporate, commercial, and SME clients, the facility provides financing for working capital needs (up to 1 year) or fixed asset purchases (up to 3 years). Repayment options are flexible, with security or collateral arranged on a case-by-case basis.
| Description | Specific Product Details |
| Name of Product: | Musawamah |
| Basis of Pricing: | A fixed profit rate OR a floating profit rate linked with a benchmark, e.g. KIBOR, is offered keeping in view the prevailing market practices/dynamics |
| Financing Limits: |
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| Tenors: |
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| Target Customers: | Corporate/Commercial/SME |
| Security/Collateral: | On a case-to-case basis, e.g. hypothecation, charge on assets, mortgage of properties, pledge, lien on deposits, etc. as per facility approval |
| Repayment: |
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