Murabaha Price and Fee Disclosure Checklist South Africa
A Murabaha quotation should disclose more than a monthly instalment. The customer needs to see the provider’s acquisition cost, agreed profit, fees, payment schedule, asset transfer and the consequences of cancellation, late payment and early settlement.
This checklist is general information, not credit, legal, tax or Shariah advice. Review the complete signed transaction and current regulatory position.
1. Identify the asset precisely
Record the vehicle, equipment, property or goods, supplier, price, specifications and delivery conditions. The provider should not sell an unidentified asset or something it has not acquired under the documented sequence.
2. Show the provider’s cost
Obtain the supplier invoice and identify the cash price, taxes, delivery, registration and other acquisition costs. Distinguish the provider’s actual cost from customer-paid fees and optional products.
3. State the profit amount
Record the rand profit, total Murabaha sale price and how the profit was determined. If a benchmark influences pricing, explain its role without treating the transaction as a conventional loan. The agreed sale price and permitted variation rules should be clear.
4. Reconcile the payment schedule
List deposit, instalments, due dates, balloon amount and total payable. Confirm that the schedule adds to the disclosed sale price and fees. Model any variable components allowed by the contract.
5. Trace ownership and possession
Document when the provider acquires the asset, bears ownership risk and sells it to the customer. Record agency arrangements where the customer acts for the provider. The sequence should match invoices, delivery and the final sale agreement.
6. Separate security from sale
Identify reservation of ownership, mortgage, instalment-sale registration, guarantees or other security. Record enforcement rights and release steps after settlement. Security should not obscure who owns the asset at each stage.
7. List every fee
Separate initiation, administration, legal, valuation, registration, tracking, insurance or Takaful and early-settlement charges. State whether each fee is once-off or recurring and whether it enters the financed sale price.
8. Test early settlement
Request worked settlement examples. Identify outstanding sale price, fees and any rebate policy. Record whether a rebate is contractual or discretionary and how long a quote is valid.
9. Review cancellation and delivery failure
Ask what happens if the supplier cannot deliver, the asset is defective or the customer cancels before or after the provider’s purchase. Allocate deposits, supplier claims and costs in the written documents.
10. Review late payment and hardship
Identify notices, collections, default amounts, charitable treatment where applicable, restructuring and enforcement. Obtain advice on consumer-credit protections and dispute routes. Do not rely on a verbal promise.
11. Confirm Shariah evidence
Retain the product approval, named Shariah adviser or board, contract set and explanation of ownership, agency, profit and late-payment treatment. Record the evidence date.
12. Compare total outcomes
Compare total cash cost, ownership, flexibility, settlement, service and risk with realistic alternatives. Keep the quote, supplier invoice, agreements, approval evidence and decision record together.
Official starting points
Practical outcome: the customer should be able to reconcile the asset cost, profit, fees and total payments and explain the ownership sequence and exit consequences.
