An Islamic letter of credit is defined by a trade finance instrument which aims to mitigate the payments risks for a seller and the performance risks for a buyer by applying the principles of Islamic Finance.
An Islamic letter of credit shall follow the same rules as the one regulated by UCP 600 as the expansion of the Islamic finance system that produces the Islamic LC does not affect this trade finance at all by creating a new one, however with the difference of excluding exclusion of liability, and discrepancy fees.
The Islamic of letter credit is specific when it comes use the several types of Islamic LC which are using the equivalent options like the conventional system but by applying strictly the Sharia rules with the absence of Riba, these solutions are: Murabahah ILC, Musharaka ILC, Wakalah ILC.
A halal letter of credit in all don’t create a problem when it comes to apply Sharia banking with this product and the typical LC sight letter of credit LC does not create any problems from the Islamic point of view, the issues are more related to the peripheric options like refinancing or deferred payment and to the imported or exported products themselves.
HALAL MORTGAGE TAKAFUL INSURANCE STUDENT INSURANCE CAR INSURANCE HOME INSURANCE REAL ESTATE INSURANCE LIFE INSURANCE BUSINESS INSURANCE TRAVEL INSURANCE HAJJ UMRAH INSURANCE FUNERAL INSURANCE MOSQUE INSURANCE AUSTRALIA INSURANCE GERMANY INSURANCE ISLAMIC CAR LOAN ISLAMIC MICROFINANCE WITHOUT INTEREST BUSINESS LOAN FOR WOMEN TAKAFUL MORTGAGE LOAN WITH POOR CREDIT ISLAMIC DEBT CONSOLIDATION DISABILITY LOAN STUDENT LOAN ISLAMIC LEASING LETTER OF CREDIT PERSONAL LOAN FOR STARTUP PRIVATE LOAN CROWDFUNDING CALCULATOR FOR WEDDING FOR EXPATRIATE ISLAMIC INSURANCE INDIA TAKAFUL ISLAMIC HEALTH INSURANCE USA TAKAFUL CANADA TAKAFUL UK TAKAFUL FARMER LOAN CORONOVIRUS LOAN TAXI LOAN RAMADAN LOAN LIST OF ISLAMIC BANKS ALBANIA ALGERIA AUSTRALIA BAHRAIN BANGLADESH BOSNIA-HERZEGOVINA BRUNEI CANADA CHINA DENMARK DJIBOUTI EGYPT ETHIOPA FRANCE INDONESIA IRAN IRAQ IVORY COAST JORDAN KAZAKHSTAN KENYA KUWAIT KYRGYZSTAN LEBANON LIBYA LUXEMBOURG MALAYSIA MALI MAURITANIA MOROCCO NETHERLANDS NIGERIA NORWAY OMAN PAKISTAN PALESTINE PHILIPPINES QATAR RUSSIA SAUDI-ARABIA SENEGAL SINGAPORE SRI-LANKA SUDAN SWITZERLAND SYRIA TAJIKISTAN TANZANIA THAILAND TUNISIA TURKEY U.A.E UNITED-KINGDOM U.S.A UZBEKISTAN YEMEN AZERBAIJAN INDIA BELGIUM GERMANY IRELAND ITALY NEW-ZEALAND SPAIN SWEDEN BULGARIA KOSOVO SOUTH-AFRICA LONDON