How does the Murabaha Treasury Deposit account work?
The Murabaha Treasury Deposit Account uses agency arrangements to undertake commodity Murabaha transactions. You appoint Islamic Bank of Britain to act as your agent to purchase and sell Sharia compliant commodities on your behalf.
The process is as follows:
| Step 1 |
| You, the customer enter into an agreement with Islamic Bank of Britain to appoint us as your agent to buy and sell commodities. |
| Step 2 |
| When you have funds to invest, you send us a request setting out the amount you wish to deposit and the period you wish to deposit for. |
| Step 3 |
| We will make enquiries and inform you, through an offer, of a commodity transaction that we can undertake on your behalf and the expected profit rate(s) |
| Step 4 |
Upon your confirmation of the offer and receipt of funds from you, we will, as your agent, buy commodities from for example, the London Metal Exchange, on your behalf.
|
| Step 5 |
| Again, as your agent we will sell these commodities on your behalf at the profit rate already indicated to you with settlement of the sale price deferred for a period also agreed with you. We may act as the buyer of the commodities from you. |
| Step 6 |
| We will then send you confirmation of the transaction, including the sale price and the profit due to you on maturity of your treasury deposit account. |
| Step 7 |
| On the date of settlement of the sale price, we will arrange to collect these funds and credit them to your account. You will receive your initial deposit plus profit. |