The bank should, first of all, notify the client of such a commission. If it is agreed with the client that the bank is entitled to receive the commission, the amount of commission is deducted from the principal amount per the provisions of the Murabaha contract. If the receipt of the commission is not declared by the bank, then the commission will be held to be the client's property.

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.

It is permissible to sell the asset in such a circumstance. The buyer may get the asset registered directly in his own name. However, it is imperative that the title of such an asset be in the name of the bank.

The described transaction is not a valid Murabaha transaction and, furthermore, is unlawful in the Shariah. A Murabaha entails selling a particular commodity that the seller owns, disclosing its cost and adding a profit margin mutually agreed upon by both parties. A Murabaha is not valid for goods that have neither been bought nor received by the seller nor are in his possession.

The transaction described in the question is not permissible, as it amounts to an interest-based financing by the bank. If the bank becomes aware of such an agreement between the client and owner of goods, it should refuse to provide financing.

Dealing with a client who has a previous contract with the owner of the goods depends on the nature of such a previous contract. If the contract is a general agreement and does not cover a specific transaction, then a Murabaha may be entered into. If, however, the contract is for a specific transaction, then this contract should be terminated before entering into a Murabaha transaction. As proof of termination, the client should provide the bank written evidence indicating that the client and owner of the goods have terminated their previous contract.

Murabaha is a contract of sale in which the owner of an asset sells the asset to the buyer at a known mark-up. The transaction described does not fall under the category of Murabaha since there is no asset to sell. However, such a transaction may be financed under an Istisna mode of financing.

The liability of the bank as regards goods to be sold under a Murabaha contract ends once the goods are delivered to the client. In case of imported goods, the bank's liability ends once the goods arrive at the port and the client receives the shipping documents.

If what is meant is the Agreement available at www.EthicaInstitute.com, in section 2.01 it says "Upon receipt by the Institution of the Client's Purchase Requisition advising the Institution to purchase the Goods and making payment therefore, the Institution shall acquire the Goods either directly or through the Agent." This shows that the Agreement does not assume the bank already possesses the goods.

Since Murabaha is a cost-plus sale, profits are measurable and known at the contract date. Therefore, it is permissible to accrue the total amount of profit from a transaction on the date on which the Murabaha contract was executed.