Islamic Finance: Murabahah Transaction Standard

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20 Questions

What is the preferred addressee for the invoice according to the text?

The Institution

When is a statement of prices considered an invitation to negotiate and not an offer of sale?

When it is a general offer with no reference to any named customer

What is essential to exclude for a transaction to qualify as Murabahah?

Any prior contractual relationship between the customer and the original supplier

In a Murabahah transaction, who must be the party from whom the item is bought?

The supplier of the ordered item

What would render a sale transaction void according to the text?

If the item is bought from the customer or his agent

What does Standard 1 cover?

Various stages of the Murabahah transaction

According to the standard, what does the customer's wish to acquire an item through the Institution constitute?

A promise or commitment

What is permissible for the customer to request the Institution according to item 2/1/2?

To request the Institution to purchase the item from a particular source of supply

What does Standard 1 not cover?

Trust and bargaining sales

What is the Institution entitled to do according to item 2/1/2?

Decline to carry out the transaction if the customer refuses offers from other sources of supply

What is the purpose of the customer's promise to purchase in a Murabahah transaction?

To provide assurance that the customer will complete the transaction

Under what condition is a bilateral promise between the customer and the Institution permissible?

If it can be cancelled by either party or both parties

What is permissible for the Institution in a 'sale or return' basis transaction?

To return the item to the supplier within a specified period

What is not permissible for the Institution in relation to commissions and expenses?

Bearing all expenses for preparing the documents of the contract

What should happen before the execution of a Murabahah if the Institution and the customer agree to revise the terms of the promise?

The terms can only be revised with mutual consent by both parties

What is not permissible for the Institution and the customer to agree to form?

Murabahah on deferred payment terms

What is impermissible to issue as per the text?

Negotiable Sukuk with underlying Murabahah receivables

What is not permitted to carry out on deferred payment terms as per the text?

Murabahah involving currency assets

What is impermissible to renew as per the text?

Murabahah contract on a new commodity

What must be verified before entering into Murabahah if the supplier (owner) has a blood relationship or marital relationship with the customer?

That the sale is not a stratagem for Inah

This quiz covers the Murabahah transaction and its stages, guarantees before concluding a Murabahah deal, and issues relating to debt recovery. It does not cover deferred payment sales on a basis other than that of Murabahah or other trust and bargaining issues.

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