Meaning of Bai-Muajjal
The terms ‘Bai’ and ‘Muajjal’ have been derived from Arabic words ‘Bai’ and ‘Ajle’ The word ‘Bai’ means purchase and sale and the word ‘Ajle’ means a fixed time or a fixed period. ‘Bai-Muajjal’ means sale for which payment is made at a future fixed date or within fixed period. In short, it is a sale on Credit.
Bai-Muajjal may be defined as a contact between a Buyer and a seller under which the Seller sells certain specific goods (permissible under Shariah and Law of the Country) to the buyer at an agreed fixed price payable at a certain fixed future date in lump sum or within a fixed period by fixed installments. The seller may also sell the goods purchased by him as per order and specification by the buyer.
In this Bank, Bai-Muajjal is treated as a contract between the Bank and the Client under which the Bank sells to the Client certain specified goods, purchased as per order and specification of the Client at an agreed price payable within a fixed future date in lump sum or by fixed installments.
Thus it is a credit sale of goods by which ownership of the goods is transferred by the Bank to the Client but the payment of sale price by the Client is deferred for a fixed period.
It may be noted here that in case Bai-Muajjal and Bai-murabaha, the Islamic Bank is a financier to the Client not in the sense that the Bank finances the purchase of goods by the Client , rather it is a financier by deferring the receipt of the sale price of goods, it sells to the Client . If the Bank does not purchase the goods or does not make any purchase agreement with seller, but only makes payment of any goods directly purchased and received by the Client from the seller under Bai-Muajjal/Bai-Murabaha agreement, that will be a remittance payment of the amount on behalf of the Client, which shall be nothing but a loan to he Client and any profit on this amount shall be nothing but interest.
Therefore, purchase of goods by the Bank should be for and on behalf of the Bank and the payment of price of goods by the Bank must be made for and on behalf of the Bank. If in any way the payment of price of goods is turned into a payment for and on behalf of the Client or it is paid to the Client any profit on it will be Riba.
Important Features of Bai-Muajjal
# It is permissible for the Client to offer an order to purchase by the Bank particular goods deciding its specification and committing himself to buy the same from the Bank on Bai-Muajjal i.e. deferred payment sale at fixed price.
#It is permissible to make the promise binding upon the Client to purchase from the Bank, that is, he is to either satisfy the promise or to indemnify the damages caused by breaking the promise without excuse.
#It is permissible to take cash/ collateral security to Guarantee the implementation of the promise or to indemnify the damages.
#It is also permissible to document the debt resulting from Bia-Muajjal by a Guarantor, or a mortgage. Or both like any other debt. Mortgage / Guarantee / Cash security may be obtained prior to the signing of the Agreement or at the time of signing the Agreement.
#Stock and availability of goods is a basic condition for signing a Bai-Muajjal Agreement. Therefore, the Bank must purchase the goods as per specification of the Client to acquire ownership of the same before signing the Bai-Muajjal Agreement with the Client .
#After purchase of goods the Bank must bear the risk of goods until those are actually delivered to the Client #The Bank must deliver the specified Goods to the Client on specified date and at specified place of delivery as per Contract.
#The Bank may sell the goods at a higher price than the purchase price to earn profit.
#The price once fixed as per agreement and deferred can not be further increased.
#The Bank may sell the goods at one agreed price which will include both the cost price and the profit. Unlike Bai-Murabaha, the Bank may not disclose the cost price and the profit mark-up separately to the Client .
Purchase of Goods By The Bank
Remember that Bai-Muajjal is perfectly a legitimate transaction according to the Shariah, provided:
a) That the goods desired by the Client is first purchased by the Bank and ownership of the Bank on the goods is established, i.e., the Bank must transform its money into goods.
b) That after purchase of goods the risk of the goods is borne by the Bank until the possession of the Merchandise has been passed on to the Client , i.e., “the Bank would have to continue to be responsible until the goods were actually delivered to the Client , in accordance with specifications and other terms of the contract”
c) That the specification of goods, delivery date, time and place and other terms of the contract are ensured.
In short, firstly, the transformation of Money into Goods by the Bank and secondly, to bear the Risk of transformation and that of the Goods by the Bank until the same is handed over to the Client are the two essential conditions, in order to make a Bai-Muajjal transaction Halal.
Any deviation from the above two conditions will deteriorate the transaction into purely financing arrangements with the agreed profit which will be nothing more than a camouflage for interest.
Therefore, in order to make Bai-Muajjal transaction ‘Halal’ (legitimate) the following procedures shall have to be followed:
1. Obtain deal-wise Application / Order for purchase after due study.
2 . Open Investment Account in Investment Account Opening Register which will be maintained mode-wise suffixing Client’s Fixed number giving deal Number chronologically. Mode-wise separate Folio shall be allotted for each deal of Investment.
3. Enter the Account Particulars in the Investment ledger
4. Complete all Ledger Head particulars and get them authenticated by an Authorised Official.
5. It should be carefully noted that Purchase of goods shall be made only after completion of all the Documentation formalities.
6. Bai-Muajjal goods may be purchased and delivery of the same may be taken directly by the Bank from the market / genuine producers/sellers/suppliers through any Authorised Official on Cash or Credit basis.
Or
These may also be done through any Buying Agent (Individual / Firm / organization) duly engaging and authorizing them by a separate contract to purchase and take delivery of the goods on behalf of the Bank as its agent.
7. In case of purchase and taking delivery of the goods by the Bank’s authorized officials
the following procedures shall have to be followed:
a) Authorised official(s) along with the Client shall contact with the genuine producers/sellers/suppliers of the goods under transaction personally, will verify the quality, quantity, and other specifications supplied by the Client , study the market, collect the price / quotation, bargain with them, settle price and finalize the purchase mentioning the date and place of delivery and terms of payments keeping proper record of the same.
Or
On being satisfaction after physical verification the whole process may be completed by paper correspondence or over telephone / Telex/Fax etc. by keeping proper record thereof (Any verbal talk made with the seller must be followed by a letter to him by the Branch).
b) However, in case of purchase / lifting against allotment(a) which is in the name of the Client, from Govt., Semi-Govt. Autonomous, Semi-Atonomous and reputed private concerns, physical verification may not be essential. In such cases the Bank must obtain valid letter of authority from the allottee to purchase and lift the goods by the Bank before making payment to the allotting authority. Otherwise, purchase of those goods by the Bank will not be valid as per Islamic shariah.
8. In case of purchase of Bai-Muajjal goods by the Bank on credit/ deferred payment
basis, the Bank shall execute a ‘Credit Purchase Agreement’ with the seller to that effect mentioning date of delivery of Goods to the Bank and the of payment by the Bank.
9. If the goods are to be purchased from the local or outstation market and money is to be paid/remitted through PO/TT/DD etc., the PP/TT/DD must be on behalf of the Bank and the commission thereof and other expenses such as T.A., D.A., transportation etc. shall be borne by the Bank, which shall ultimately be loaded on the cost of goods.
The Incumbent in charge, the Second Officer are the Investment-in-charge of the Branch will sign the PO/TT/DD Application Form on behalf of the Bank.
10. In Case of purchase of goods by the agent engaged for the purpose, he will purchase the goods from the genuine Producers/Sellers/Suppliers in the local market or outstation markets following the same procedures as is followed by the Bank Officials, on behalf of the Bank.
11. Agency commission, if any, paid by the Bank shall be added to the cost of goods.
Taking Delivery of Goods by the Bank
After finalization of purchase of Bai-Muajjal Goods either by the Bank Officials or through any Agent from the local or out station market the Bank shall request the seller to deliver the goods purchased (as per terms of transaction) to the Bank’s authorized official / Agent / Representative / Client or to the Bank’s godown against proper acknowledgement. Accordingly the aughorized official / agent / representative / Client shall receive delivery of goods by signing the delivery challan or the cash memo/ purchase schedule which shall be exclusively in the name of the Bank.
After taking delivery of the goods by the Bank or through an agent, the Bank shall make payment of the price of the goods to producers / sellers / suppliers through DD/TT/PO against cash memo/money receipts which shall exclusively be issued in the name of the Bank.
However, in case of Govt., Semi-Govt., autonomous and Semi-autonomous bodies and reputed private concerns, where the goods are allocated in the name of Client or any other form(s) and where the delivery of goods are normally given after making payments if the supply / delivery of goods is 100% certain, the Bank may make payment through DD/PO/ in favour of the Allotting / Supplying authority after taking due authorization from the allottee / Client to purchase and lift the goods by the Bank and make arrangement that the delivery of the goods to the Bank and not to the allottee or Client .
An attested copy / photocopy of the delivery order issued by the allotting authority be kept in the file to ascertain the date of receipt of the goods by the Bank.
The Bank shall not invest in such cases where the allotting authority will not accept the letter of authority and agree to deliver the goods to the Bank as per authorization of the allottee.
DD/PO may be issued in the name of the buying agent. In such a case a letter of request detailing purpose as well as indemnifying the Bank of loss, accident either in cash or kind shall be obtained, besides adequate cash/collateral security/ personal guarantee.
Sale and delivery of goods to the Client
The Bank after receiving the goods, shall finally calculate the total cost price and fix up the sale price by mutual discussion with Client . The calculation of the total cost price and the sale price should be as per following proforma.
Working out purchase and sale price of Bai-Muajjal Goods
C. (TOTAL COST _ A + B ) TK ..............................
D. MARK UP PROFIT OF THE BANK. TK. .......... (Profit in percentage of total cost price)
E. TOTAL SALES PRICE ( C + D ) TK. .............................................
PREPARED BY INVESTMENT INCHARGE 2 ND OFFICER SVP/VP/AVP/MANAGER
Fix up the schedule of payment of price of Bai-Muajjal goods by the Client either by
installment or in lump sum. If it is by installment, every installment will include proportionate amount of principal and profit.
The following Accounting entries shall be passed at various stages of Bai-Muajjal Investment:-
1. While receiving Cash Security from the Client before purchasing the goods, the
following entries shall be passed:
Dr. Cash or Client’s Current A/C ............................ .M/s ........................................
(Client) .............................................................
Cr. Bai-Muajjal Investment A/c (Security Deposit) (Commercial/ Industrial/
Agricultural etc. A/C. M/s. ..................................(Client)...........................
(Being the amount of Security Deposit realised from the Client against Deal
No..................... Dated.............................. M/s ..................................................)
2. While purchasing the goods by the Bank the following entries shall be passed:
2.1. Dr. Bai-Muajjal Investment Account (Commercial/Industrial/Agricultural etc.)
Deal No……………………date…………………..for M/s………………………
Cr. Payment Order/DD/TT/Current A/C (Favouring Seller/Buying Agent of the Goods as per purchase contract with the Seller/Buying Agent Deal
No……………………date…………………..for M/s………………………)
(Being the amount of purchase price of Bai-Muajjal goods ………..units
@Tk……………per unit under Deal No……………………date…………………..for M/s………………………)
2.2. Dr. Bai-Muajjal Investment Account (Commercial/Industrial/Agricultural etc)
for Remittance
Commission/ Transportation Cost/Transit Insurance/ Insurance Premium etc. incurred against Deal No……………………dated…………………..for M/s………………………in connection with purchase
Cr. Remittance Commission/ Cash or Payment Order for the Conveyance TA/DA/ Transportation Cost / Transit Insurance Premium/ Godown Rent, Godown Insurance, Godown Staff Salry, Agency Commission etc., if any, incurred by the Bank in connection with the purchase of goods and before delivery of the same to the Client under Bai-Muajjal Investment A/C No……………… Deal No…………………… dated………………….. for M/s………………………
2.3. In case the Bank fails to take delivery / procure the goods from the Seller or Supplier of the goods and the Supplier paid back the purchase price of the goods paid to him in advance the following entities shall be passed:
Dr. Cash / Supplier / Seller’s / Buying Agent’s A/C /P.O Payable A/c. I.B. General A/c./ Balance with Other Bank A/C. No………………..of M/s………………………………….
Cr. Bai-Muajjal Investment A/C No………………………………..
Cr. Client’s Current Account No……………( refund of cash security deposited by the Client earlier)
(Being the purchase price refunded by the Producer/Seller/Suppliers/Buying Agent).
3. After execution of Bai-Muajjal Agreement and delivery of the goods by the Bank to the Investment Client(s)
3.1 Dr. Bai-Murabaha Investment A/C No ………………………………………… Deal
No…………………… dated………………….. of the Client M/s ………………….
(Being the profit amount on the goods payable by the Client). It may be noted that the total cost price, profit charges etc. shall be entered in the respective column in the Investment ledger)
Cr. Profit Receivable A/C. (Bai-Muajjal Investment A/C No…………………………………… Deal No…………………… of M/s………………………)
Being the amount of Bank’s profit on the Bai-Muajjal Investment A/C No……………… Deal No…………………… dated………………….. of M/s……………………… (Client) ……………………..)
4. Storage, Insurance and Maintenance Cost, if any, incurred after sale of goods to the client (Normally, the cost shall be paid by the client from his own sources): In case, the client fails to pay the same charges in Cash at the moment, the bank will pay the same to the Debit of Investment A/C of the client passing the following entries with the recourse to recover the same from the immediate next payment of the client:
Dr. Bai-Muajjal Investment A/C ……………… Deal No…………………… dated………………….. of M/s………………………
Cr. Cash or Payment Order favouring the beneficiary.
(Being the …………….expense………………incurred in connection with the storage, maintenance insurance of the goods after sale of the same to the client with proper advice to the client.)
5. Recovery / Reimbursement of the Expenses incurred by the bank for maintenance of the Stocks after delivery to the Cleint:
5.1. Dr. Cash / Current A/C of the Client.
Cr. Bai-Muajjal Investment A/C No ……………… Deal No…………………… dated………………….. of M/s………………………
(Being the amount recovered against expense such as Insurance Premium, Godown Staff Salary. Godown Rent etc. incurred by the bank for maintenance and storage of the stocks. It may be noted that any amount paid by the Clent shall first be credited towards adjustment of these charges)
5.2. While Recovery / payment is made by the client for adjustment of the investment account.
Dr. Cash / Current A/C of the Client.
Cr. Bai-Muajjal Invest A/C No……………… Deal No…………………… dated………………….. of M/s………………………
(Being the amount of principal and profit realized from the Client)
It may be noted that any amount paid by the Client towards adjustment of his Investment A/C shall be Credited proportionately towards principal and time apportioned profit amount of the Bank.
6. While transferring the proportionate profit from Profit Receivable A/C to the Investment income A/C on the deal for each month.
Dr. Profit Receivable A/C
Cr. Investment Income A/C. (Bai-Muajjal-Commercial / Industrial/ Agricultural)
(Being the amount of Proportionate profit for the month of …………….year……………
7. While allowing rebate for early adjustment of Banks dues: The following entries shall be passed.
Dr. Profit Receivable A/C./ Investment Income A/c (if excess amount of profit was transferred to Investment Income A/c.)
Cr. Bai-muajjal Investment A/C No……………… Deal No…………………… dated………………….. of M/s………………………
(Being the amount of rebate allowed for adjustment of the Investment A/C in lump sum but very nearest to amount to be arrived at the calculated rate of profit (R.R.%)
8. While Charging Compensation for overdue period:
Dr. Bai-Muajjal Investment A/C No……………… Deal No…………………… dated………………….. of M/s………………………………………………
Cr. Sundry Deposit: Compensation charged for the overdue period form …..to …..)
Being the amount of compensation charged for the overdue period from ….to ………)
If the investment A/C becomes overdue, send the proposal / R.C. Memo to the review committee to have their decision regarding compensation. No Compensation shall be imposed before getting the decision of the Review committee. In case where R.C. decides not to impose compensation, the following entries shall be passed:
Dr. Sundry Deposit: Compensation Realisable A/C
Cr. Bai-Muajjal Investment A/C
I hope my articl
e of Bai-Muajjal, will help interested readers of islamic banking.
The terms ‘Bai’ and ‘Muajjal’ have been derived from Arabic words ‘Bai’ and ‘Ajle’ The word ‘Bai’ means purchase and sale and the word ‘Ajle’ means a fixed time or a fixed period. ‘Bai-Muajjal’ means sale for which payment is made at a future fixed date or within fixed period. In short, it is a sale on Credit.
Bai-Muajjal may be defined as a contact between a Buyer and a seller under which the Seller sells certain specific goods (permissible under Shariah and Law of the Country) to the buyer at an agreed fixed price payable at a certain fixed future date in lump sum or within a fixed period by fixed installments. The seller may also sell the goods purchased by him as per order and specification by the buyer.
In this Bank, Bai-Muajjal is treated as a contract between the Bank and the Client under which the Bank sells to the Client certain specified goods, purchased as per order and specification of the Client at an agreed price payable within a fixed future date in lump sum or by fixed installments.
Thus it is a credit sale of goods by which ownership of the goods is transferred by the Bank to the Client but the payment of sale price by the Client is deferred for a fixed period.
It may be noted here that in case Bai-Muajjal and Bai-murabaha, the Islamic Bank is a financier to the Client not in the sense that the Bank finances the purchase of goods by the Client , rather it is a financier by deferring the receipt of the sale price of goods, it sells to the Client . If the Bank does not purchase the goods or does not make any purchase agreement with seller, but only makes payment of any goods directly purchased and received by the Client from the seller under Bai-Muajjal/Bai-Murabaha agreement, that will be a remittance payment of the amount on behalf of the Client, which shall be nothing but a loan to he Client and any profit on this amount shall be nothing but interest.
Therefore, purchase of goods by the Bank should be for and on behalf of the Bank and the payment of price of goods by the Bank must be made for and on behalf of the Bank. If in any way the payment of price of goods is turned into a payment for and on behalf of the Client or it is paid to the Client any profit on it will be Riba.
Important Features of Bai-Muajjal
# It is permissible for the Client to offer an order to purchase by the Bank particular goods deciding its specification and committing himself to buy the same from the Bank on Bai-Muajjal i.e. deferred payment sale at fixed price.
#It is permissible to make the promise binding upon the Client to purchase from the Bank, that is, he is to either satisfy the promise or to indemnify the damages caused by breaking the promise without excuse.
#It is permissible to take cash/ collateral security to Guarantee the implementation of the promise or to indemnify the damages.
#It is also permissible to document the debt resulting from Bia-Muajjal by a Guarantor, or a mortgage. Or both like any other debt. Mortgage / Guarantee / Cash security may be obtained prior to the signing of the Agreement or at the time of signing the Agreement.
#Stock and availability of goods is a basic condition for signing a Bai-Muajjal Agreement. Therefore, the Bank must purchase the goods as per specification of the Client to acquire ownership of the same before signing the Bai-Muajjal Agreement with the Client .
#After purchase of goods the Bank must bear the risk of goods until those are actually delivered to the Client #The Bank must deliver the specified Goods to the Client on specified date and at specified place of delivery as per Contract.
#The Bank may sell the goods at a higher price than the purchase price to earn profit.
#The price once fixed as per agreement and deferred can not be further increased.
#The Bank may sell the goods at one agreed price which will include both the cost price and the profit. Unlike Bai-Murabaha, the Bank may not disclose the cost price and the profit mark-up separately to the Client .
Purchase of Goods By The Bank
Remember that Bai-Muajjal is perfectly a legitimate transaction according to the Shariah, provided:
a) That the goods desired by the Client is first purchased by the Bank and ownership of the Bank on the goods is established, i.e., the Bank must transform its money into goods.
b) That after purchase of goods the risk of the goods is borne by the Bank until the possession of the Merchandise has been passed on to the Client , i.e., “the Bank would have to continue to be responsible until the goods were actually delivered to the Client , in accordance with specifications and other terms of the contract”
c) That the specification of goods, delivery date, time and place and other terms of the contract are ensured.
In short, firstly, the transformation of Money into Goods by the Bank and secondly, to bear the Risk of transformation and that of the Goods by the Bank until the same is handed over to the Client are the two essential conditions, in order to make a Bai-Muajjal transaction Halal.
Any deviation from the above two conditions will deteriorate the transaction into purely financing arrangements with the agreed profit which will be nothing more than a camouflage for interest.
Therefore, in order to make Bai-Muajjal transaction ‘Halal’ (legitimate) the following procedures shall have to be followed:
1. Obtain deal-wise Application / Order for purchase after due study.
2 . Open Investment Account in Investment Account Opening Register which will be maintained mode-wise suffixing Client’s Fixed number giving deal Number chronologically. Mode-wise separate Folio shall be allotted for each deal of Investment.
3. Enter the Account Particulars in the Investment ledger
4. Complete all Ledger Head particulars and get them authenticated by an Authorised Official.
5. It should be carefully noted that Purchase of goods shall be made only after completion of all the Documentation formalities.
6. Bai-Muajjal goods may be purchased and delivery of the same may be taken directly by the Bank from the market / genuine producers/sellers/suppliers through any Authorised Official on Cash or Credit basis.
Or
These may also be done through any Buying Agent (Individual / Firm / organization) duly engaging and authorizing them by a separate contract to purchase and take delivery of the goods on behalf of the Bank as its agent.
7. In case of purchase and taking delivery of the goods by the Bank’s authorized officials
the following procedures shall have to be followed:
a) Authorised official(s) along with the Client shall contact with the genuine producers/sellers/suppliers of the goods under transaction personally, will verify the quality, quantity, and other specifications supplied by the Client , study the market, collect the price / quotation, bargain with them, settle price and finalize the purchase mentioning the date and place of delivery and terms of payments keeping proper record of the same.
Or
On being satisfaction after physical verification the whole process may be completed by paper correspondence or over telephone / Telex/Fax etc. by keeping proper record thereof (Any verbal talk made with the seller must be followed by a letter to him by the Branch).
b) However, in case of purchase / lifting against allotment(a) which is in the name of the Client, from Govt., Semi-Govt. Autonomous, Semi-Atonomous and reputed private concerns, physical verification may not be essential. In such cases the Bank must obtain valid letter of authority from the allottee to purchase and lift the goods by the Bank before making payment to the allotting authority. Otherwise, purchase of those goods by the Bank will not be valid as per Islamic shariah.
8. In case of purchase of Bai-Muajjal goods by the Bank on credit/ deferred payment
basis, the Bank shall execute a ‘Credit Purchase Agreement’ with the seller to that effect mentioning date of delivery of Goods to the Bank and the of payment by the Bank.
9. If the goods are to be purchased from the local or outstation market and money is to be paid/remitted through PO/TT/DD etc., the PP/TT/DD must be on behalf of the Bank and the commission thereof and other expenses such as T.A., D.A., transportation etc. shall be borne by the Bank, which shall ultimately be loaded on the cost of goods.
The Incumbent in charge, the Second Officer are the Investment-in-charge of the Branch will sign the PO/TT/DD Application Form on behalf of the Bank.
10. In Case of purchase of goods by the agent engaged for the purpose, he will purchase the goods from the genuine Producers/Sellers/Suppliers in the local market or outstation markets following the same procedures as is followed by the Bank Officials, on behalf of the Bank.
11. Agency commission, if any, paid by the Bank shall be added to the cost of goods.
Taking Delivery of Goods by the Bank
After finalization of purchase of Bai-Muajjal Goods either by the Bank Officials or through any Agent from the local or out station market the Bank shall request the seller to deliver the goods purchased (as per terms of transaction) to the Bank’s authorized official / Agent / Representative / Client or to the Bank’s godown against proper acknowledgement. Accordingly the aughorized official / agent / representative / Client shall receive delivery of goods by signing the delivery challan or the cash memo/ purchase schedule which shall be exclusively in the name of the Bank.
After taking delivery of the goods by the Bank or through an agent, the Bank shall make payment of the price of the goods to producers / sellers / suppliers through DD/TT/PO against cash memo/money receipts which shall exclusively be issued in the name of the Bank.
However, in case of Govt., Semi-Govt., autonomous and Semi-autonomous bodies and reputed private concerns, where the goods are allocated in the name of Client or any other form(s) and where the delivery of goods are normally given after making payments if the supply / delivery of goods is 100% certain, the Bank may make payment through DD/PO/ in favour of the Allotting / Supplying authority after taking due authorization from the allottee / Client to purchase and lift the goods by the Bank and make arrangement that the delivery of the goods to the Bank and not to the allottee or Client .
An attested copy / photocopy of the delivery order issued by the allotting authority be kept in the file to ascertain the date of receipt of the goods by the Bank.
The Bank shall not invest in such cases where the allotting authority will not accept the letter of authority and agree to deliver the goods to the Bank as per authorization of the allottee.
DD/PO may be issued in the name of the buying agent. In such a case a letter of request detailing purpose as well as indemnifying the Bank of loss, accident either in cash or kind shall be obtained, besides adequate cash/collateral security/ personal guarantee.
Sale and delivery of goods to the Client
The Bank after receiving the goods, shall finally calculate the total cost price and fix up the sale price by mutual discussion with Client . The calculation of the total cost price and the sale price should be as per following proforma.
Working out purchase and sale price of Bai-Muajjal Goods
A. Purchase price of Goods
Sl. No.
|
Particulars / Quality of Goods desire to purchase
|
Rate per unit
|
Amount
|
Remarks
|
1.
2.
3.
| ||||
Subtotal
| ||||
B. Other expenditure in connection with the purchase such as transportation, storage etc. of the goods.
SL. No.
|
PARTICULARS/QUANTITY
|
RATE PER UNIT
|
AMOUNT
|
REMARKS
|
1.
2.
3.
4.
5.
6.
7.
8.
|
Conveyance - TA/DA of Bank Official or the Agent (if any)
Commission paid to the Agent, if any
Cost of Remittance of Fund
Transportation Cost up to Bank’s Godown (if not sold just after purchase)
Transit Insurance and Incidental Expenses
Other Expenses except interest, if any.
Godown Rent and Godown Staff Salary, if any incurred before sale of goods to the Client.
| |||
C. (TOTAL COST _ A + B ) TK ..............................
D. MARK UP PROFIT OF THE BANK. TK. .......... (Profit in percentage of total cost price)
E. TOTAL SALES PRICE ( C + D ) TK. .............................................
PREPARED BY INVESTMENT INCHARGE 2 ND OFFICER SVP/VP/AVP/MANAGER
Fix up the schedule of payment of price of Bai-Muajjal goods by the Client either by
installment or in lump sum. If it is by installment, every installment will include proportionate amount of principal and profit.
The following Accounting entries shall be passed at various stages of Bai-Muajjal Investment:-
1. While receiving Cash Security from the Client before purchasing the goods, the
following entries shall be passed:
Dr. Cash or Client’s Current A/C ............................ .M/s ........................................
(Client) .............................................................
Cr. Bai-Muajjal Investment A/c (Security Deposit) (Commercial/ Industrial/
Agricultural etc. A/C. M/s. ..................................(Client)...........................
(Being the amount of Security Deposit realised from the Client against Deal
No..................... Dated.............................. M/s ..................................................)
2. While purchasing the goods by the Bank the following entries shall be passed:
2.1. Dr. Bai-Muajjal Investment Account (Commercial/Industrial/Agricultural etc.)
Deal No……………………date…………………..for M/s………………………
Cr. Payment Order/DD/TT/Current A/C (Favouring Seller/Buying Agent of the Goods as per purchase contract with the Seller/Buying Agent Deal
No……………………date…………………..for M/s………………………)
(Being the amount of purchase price of Bai-Muajjal goods ………..units
@Tk……………per unit under Deal No……………………date…………………..for M/s………………………)
2.2. Dr. Bai-Muajjal Investment Account (Commercial/Industrial/Agricultural etc)
for Remittance
Commission/ Transportation Cost/Transit Insurance/ Insurance Premium etc. incurred against Deal No……………………dated…………………..for M/s………………………in connection with purchase
Cr. Remittance Commission/ Cash or Payment Order for the Conveyance TA/DA/ Transportation Cost / Transit Insurance Premium/ Godown Rent, Godown Insurance, Godown Staff Salry, Agency Commission etc., if any, incurred by the Bank in connection with the purchase of goods and before delivery of the same to the Client under Bai-Muajjal Investment A/C No……………… Deal No…………………… dated………………….. for M/s………………………
2.3. In case the Bank fails to take delivery / procure the goods from the Seller or Supplier of the goods and the Supplier paid back the purchase price of the goods paid to him in advance the following entities shall be passed:
Dr. Cash / Supplier / Seller’s / Buying Agent’s A/C /P.O Payable A/c. I.B. General A/c./ Balance with Other Bank A/C. No………………..of M/s………………………………….
Cr. Bai-Muajjal Investment A/C No………………………………..
Cr. Client’s Current Account No……………( refund of cash security deposited by the Client earlier)
(Being the purchase price refunded by the Producer/Seller/Suppliers/Buying Agent).
3. After execution of Bai-Muajjal Agreement and delivery of the goods by the Bank to the Investment Client(s)
3.1 Dr. Bai-Murabaha Investment A/C No ………………………………………… Deal
No…………………… dated………………….. of the Client M/s ………………….
(Being the profit amount on the goods payable by the Client). It may be noted that the total cost price, profit charges etc. shall be entered in the respective column in the Investment ledger)
Cr. Profit Receivable A/C. (Bai-Muajjal Investment A/C No…………………………………… Deal No…………………… of M/s………………………)
Being the amount of Bank’s profit on the Bai-Muajjal Investment A/C No……………… Deal No…………………… dated………………….. of M/s……………………… (Client) ……………………..)
4. Storage, Insurance and Maintenance Cost, if any, incurred after sale of goods to the client (Normally, the cost shall be paid by the client from his own sources): In case, the client fails to pay the same charges in Cash at the moment, the bank will pay the same to the Debit of Investment A/C of the client passing the following entries with the recourse to recover the same from the immediate next payment of the client:
Dr. Bai-Muajjal Investment A/C ……………… Deal No…………………… dated………………….. of M/s………………………
Cr. Cash or Payment Order favouring the beneficiary.
(Being the …………….expense………………incurred in connection with the storage, maintenance insurance of the goods after sale of the same to the client with proper advice to the client.)
5. Recovery / Reimbursement of the Expenses incurred by the bank for maintenance of the Stocks after delivery to the Cleint:
5.1. Dr. Cash / Current A/C of the Client.
Cr. Bai-Muajjal Investment A/C No ……………… Deal No…………………… dated………………….. of M/s………………………
(Being the amount recovered against expense such as Insurance Premium, Godown Staff Salary. Godown Rent etc. incurred by the bank for maintenance and storage of the stocks. It may be noted that any amount paid by the Clent shall first be credited towards adjustment of these charges)
5.2. While Recovery / payment is made by the client for adjustment of the investment account.
Dr. Cash / Current A/C of the Client.
Cr. Bai-Muajjal Invest A/C No……………… Deal No…………………… dated………………….. of M/s………………………
(Being the amount of principal and profit realized from the Client)
It may be noted that any amount paid by the Client towards adjustment of his Investment A/C shall be Credited proportionately towards principal and time apportioned profit amount of the Bank.
6. While transferring the proportionate profit from Profit Receivable A/C to the Investment income A/C on the deal for each month.
Dr. Profit Receivable A/C
Cr. Investment Income A/C. (Bai-Muajjal-Commercial / Industrial/ Agricultural)
(Being the amount of Proportionate profit for the month of …………….year……………
7. While allowing rebate for early adjustment of Banks dues: The following entries shall be passed.
Dr. Profit Receivable A/C./ Investment Income A/c (if excess amount of profit was transferred to Investment Income A/c.)
Cr. Bai-muajjal Investment A/C No……………… Deal No…………………… dated………………….. of M/s………………………
(Being the amount of rebate allowed for adjustment of the Investment A/C in lump sum but very nearest to amount to be arrived at the calculated rate of profit (R.R.%)
8. While Charging Compensation for overdue period:
Dr. Bai-Muajjal Investment A/C No……………… Deal No…………………… dated………………….. of M/s………………………………………………
Cr. Sundry Deposit: Compensation charged for the overdue period form …..to …..)
Being the amount of compensation charged for the overdue period from ….to ………)
If the investment A/C becomes overdue, send the proposal / R.C. Memo to the review committee to have their decision regarding compensation. No Compensation shall be imposed before getting the decision of the Review committee. In case where R.C. decides not to impose compensation, the following entries shall be passed:
Dr. Sundry Deposit: Compensation Realisable A/C
Cr. Bai-Muajjal Investment A/C
I hope my articl
e of Bai-Muajjal, will help interested readers of islamic banking.
No comments:
Post a Comment