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TAWARRUQ - Coggle Diagram
TAWARRUQ
:check: APPLICATION :check:
Customer goes to bank and applies for tawarruq
Bank buys Commodity from market
Bank sells commodity to client, Client pays bank on credit
Client appoints bank as agent
Bank sells to market, Market pays cash
Bank pays client cash
:star: MAIN FEATURES :star:
:warning: sale and purchase contract in a tawarruq
shall be executed by entering into a separate and independent sale and purchase contract.
shall satisfy all the necessary conditions of a valid sale and purchase contract under Shariah
must be respectively evidenced by appropriate documentation or record.
:warning: The purchaser in each sale and purchase contract in the tawarruq shall
have the right to take delivery of the asset
:warning: Payment of the deferred selling price including profit shall not be made to the seller before entering into the sale and purchase contract
:silhouettes: PARTIES INVOLVE :silhouettes:
:silhouette: seller
the seller in the first sale and purchase contract shall not be the purchaser in the second sale and purchase contract in the same tawarruq
:silhouette: purchaser
:silhouette: wakil (agent) may involve
:question: DEFINITION :question:
sale contract
involves the sale of an asset by a seller to a purchaser on a deferred basis
purchase contract
the purchaser of the first sale will sell the same asset to a third party on a cash and spot basis.