It is a type of corporate financing that enables the holder of a PrimeRich Current Account-i to withdraw more than is available in the account up to a certain credit limit, without having to comply with a fixed payment schedule. Companies usually use this facility to respond to short-term cash shortage, such as that of a working capital.
Tawarruq is the Shariah instrument used in Cashline-i facilities. Sales under the Tawarruq arrangement are conducted according to Murabahah, which means that the cost and the profit margin are known and agreed upon by both parties.
Through Wakalah agreement, Customer appoints MBSB Bank as Customer’s sale and purchase agent in all sale transactions of the Tawarruq arrangement.