Islamic Trade Finance
Islamic Trade Finance
Presented by Jamaliah Abd Malik
Objective
•
At the end of this session, the participants will be able to
• List down the trade finance-i products available
• Explain briefly the concept applicable
Contents
•
•
•
•
•
Introduction
• What is trade
• Method of payments
Summary of products available with banks
Letter of credit-i
Trust receipt-i
Letter of Guarantee-i
Contents- contd
•
•
•
•
•
Shipping-i
Accepted Bills-I
Bills Purchased-i
Export Credit Refinancing-i
Other products and services
Overview of Trade Transaction
INTERNATIONAL TRADE
Goods
Introduction – Trade transaction
Sales contract
Seller
Description of goods
Method of trade settlement
• Cash
• Open account
• Doc.collection (D/p or D/A)
• Doc. Credit
INCOTERMS
Required documentation
Insurance cover etc
Buyer
Method of Trade Settlement
Methods of trade settlement
Open Account
1.Ships goods
Signs SC
Buyer
Seller
2.
Methods of trade settlement
Advance Payment
1.
Sign SC
Seller
Buyer
2. Ships goods
Methods of trade settlement
Consignment
1. Ships goods
Sign SC
Seller
Buyer
3. Pays
4. Remit Proceeds
2. Sell
Documentary
Collection
Methods of trade settlement
2. Ships goods
Buyer
Seller
1. Sign SC
3. Present docs.
Doc. collection
(sight)/DP
5. Release doc. upon payment/ financing 7. Credit a/c 6. Remit proceeds 4. Forward docs. Bank
Bank
Methods of trade settlement
Documentary2. Ships goods
Collection
Seller
Buyer
1. Sign SC
3. Present docs.
Doc. Collection
(usance)/DA
5. Release doc. upon acceptance
7. Credit a/c 6. Remit proceeds 4. Forward docs. Bank
Bank
Comparison between the Islamic and the conventional banking
Relationship between the customer and the bank
Islamic Banking
• seller and buyer • Lessor and lessee PROFIT
Conventional
Banking
•
Presented by Jamaliah Abd Malik
Objective
•
At the end of this session, the participants will be able to
• List down the trade finance-i products available
• Explain briefly the concept applicable
Contents
•
•
•
•
•
Introduction
• What is trade
• Method of payments
Summary of products available with banks
Letter of credit-i
Trust receipt-i
Letter of Guarantee-i
Contents- contd
•
•
•
•
•
Shipping-i
Accepted Bills-I
Bills Purchased-i
Export Credit Refinancing-i
Other products and services
Overview of Trade Transaction
INTERNATIONAL TRADE
Goods
Introduction – Trade transaction
Sales contract
Seller
Description of goods
Method of trade settlement
• Cash
• Open account
• Doc.collection (D/p or D/A)
• Doc. Credit
INCOTERMS
Required documentation
Insurance cover etc
Buyer
Method of Trade Settlement
Methods of trade settlement
Open Account
1.Ships goods
Signs SC
Buyer
Seller
2.
Methods of trade settlement
Advance Payment
1.
Sign SC
Seller
Buyer
2. Ships goods
Methods of trade settlement
Consignment
1. Ships goods
Sign SC
Seller
Buyer
3. Pays
4. Remit Proceeds
2. Sell
Documentary
Collection
Methods of trade settlement
2. Ships goods
Buyer
Seller
1. Sign SC
3. Present docs.
Doc. collection
(sight)/DP
5. Release doc. upon payment/ financing 7. Credit a/c 6. Remit proceeds 4. Forward docs. Bank
Bank
Methods of trade settlement
Documentary2. Ships goods
Collection
Seller
Buyer
1. Sign SC
3. Present docs.
Doc. Collection
(usance)/DA
5. Release doc. upon acceptance
7. Credit a/c 6. Remit proceeds 4. Forward docs. Bank
Bank
Comparison between the Islamic and the conventional banking
Relationship between the customer and the bank
Islamic Banking
• seller and buyer • Lessor and lessee PROFIT
Conventional
Banking
•