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Importing Goods In Name Of Buyer In Murabaha Contract

A bank orders goods from abroad in pursuance of a Murabaha transaction. The exporter sends the goods in the name of the bank’s client (promising buyer). Is this valid?

A Murabaha transaction is one in which the seller buys goods requested by the buyer and sells them to the buyer at a cost plus an agreed upon mark-up. It is necessary that the goods be dispatched or shipped in the name of the bank, as this is an integral of the contract and the only documentary evidence that proves that the seller (bank) actually bought the goods itself.

In such a case, all issued contracts or procedures entered into between the bank’s client and the exporter should be cancelled, and a new transaction should be initiated between the exporter and the bank.

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