IQIF Practice Questions - IBFIM Intermediate Qualification In Islamic Finance Exam

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In a Tawarruq structure utilized for Islamic personal financing, what is the sequence of transactions that occurs between the bank, the customer, and the commodity brokers?

The customer buys commodity from Broker A, sells it to the bank on deferred terms, and the bank sells it to Broker B. The bank buys commodity from Broker A, sells it to the customer on deferred terms, and the customer sells it to Broker B. The bank buys commodity from Broker A, sells it to Broker B, and gives the proceeds to the customer as a Qard. The customer buys commodity from Broker A on deferred terms, sells it to Broker B, and deposits the funds with the bank.

Correct Answer:

The bank buys commodity from Broker A, sells it to the customer on deferred terms, and the customer sells it to Broker B.

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