In Short  

• A sale based product under the Shariah contract of Murabahah.
• Adding mark-up to the cost of goods.
• Both the seller and the consumer are aware of a set of profit.
• The client must purchase products or assets.
• The required products must be Shariah compliant, its end use will also be Shariah compliant.
• Usually short-term finance.

Salient Features

• This is a mode of finance generally used for short-term finance requirement of the client.
• Client may place an order to purchase goods by the bank and committing to buy the same from the bank.
• The bank must purchase the goods as per specification of the Client to acquire ownership of the same before signing the Murabahah agreement with the Client.
• The bank may authorize any third party to buy and receive the goods on Bank's behalf. The authorization must be in a separate contract.
• Agreed price will include the cost price and profit. Bank must disclose the cost price and profit.
• The price once fixed as per agreement and deferred amount cannot be further increased.
• It is permissible to take cash / collateral security to guarantee the implementation of the promise or to indemnify the damages.
• Stock and availability of the goods is a basic condition. Bank must purchase the goods to acquire ownership.
• After purchase, the bank must bear the risk of goods until delivered.
• Bank must ensure delivery of the specified goods to the client on specified date and at a specified place.

Following products are available under MPO