IBANK 6.7.3 Treatment of Murabahah and Related Contracts

(1) An Islamic banking business firm is exposed to market risk under a murabahah contract when the asset is available for sale and on firm's balance sheet.
(2) The capital charge for a murabahah contract is 15% on the position. There is no capital charge for a binding MPO contract or a CMT.

Note In the case of a CMT where the firm holds on to the commodity for a longer period than normal (for example, following the customer's refusal to honour its commitment to buy) the commodity is subject to a capital charge of 15%.
(3) Bai bithaman ajil and musawamah contracts are treated in the same way as murabahah contracts.
Derived from QFCRA RM/2015-2 (as from 1st January 2016).