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Documentary Credit For Murabaha Sales
Is it permissible for the bank to issue documentary credit to a company for the purpose of selling it goods it has not yet received from the manufacturer? Would this be a Murabaha?
It is not lawful for the bank to issue documentary credit to a company for the purpose of selling it goods before having purchased them from the manufacturer. This is because among the conditions of a sale is that the object of the sale be owned by the seller at the time of the sale. Such a transaction cannot be considered a Murabaha since the seller's ownership is a condition before it can be sold to the purchase pledger.

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