LETTER OF CREDIT (L / C)

LETTER OF CREDIT (L / C)

Wakalah, contract also applied in import transactions made by customers, which is known as transaction import letter of credit (L / C imports). L / C is the import statement shall pay to the exporter (beneficiary), published by the Islamic bank (issuing bank) at the request of or for the benefit of importers to the fulfillment of certain requirements in accordance with Islamic principles. In general, facilities or services of L / C is given by the bank to customers in order to facilitate and expedite the buying and selling of goods, especially related to exports and imports. If the bank issuing the L / C to the customer, it means bank guarantee would pay a certain amount to the other party at the request of the customer.
Accordance with DSN Number 34/DSN-MUI/IX/2002 on Letter of Credit (L / C) that Sharia Import L / C imports allowed under sharia implementation using contract-contract wakalah bil ujrah, qardh, murabaha, salam / istishna ', mudaraba, Musharaka and hawalah. In the L / C import sharia-based wakalah bil ujrah, Islamic banks act as representatives and importers as well as the guarantor of the payment as well as muwakkil customers. As a representative of the customer, Islamic banks have to implement all the things that have been delegated to him and as muwakkil customer must specify the matters delegated to the bank, so that everything becomes clear and no gharar. However, before the delegate to obtain travel documents and payment of import transactions, customer (muwakkil) must have funds in the bank for payment of the price of imported goods. If the customer does not have the funds in Islamic banks concerned for payment of the price of imported goods, Islamic banks should provide bailout funds for interest payments and for it to be treated as funds qardh, murabaha financing by the importer, or working capital financing (Musharaka) to importers .
From transaction import L / C sharia, banks get rewarded (ujrah) or in the form of profit margin (in terms of using the sale and purchase agreement) or for the results. As for customers, obtain payment settlement services and / or guarantees and acceptances that support activities in international trade. Basically the risk of transaction L / C for import sharia bank is financing risk (credit risk) in terms of customer (importer) does not pay the bills completion of L / C. other than that, there is a liquidity risk in banks having difficulty obtaining the required type of currency at the time and reputational risk in the bank is unable to meet the terms of the commitment required. As for the other risks associated with the reliability of information technology management (operational risk) and risk that accompany contract granting the L / C, for example, murabaha contract in the purchase of imported goods.