Definition: Mozarebeh is a kind of contract that is concluded by and between the bank and another entity (natural or legal) to embark on and to realize a trade issue. In this contract, the bank as owner of cash capital provides the required capital and another party (the agent) is business executive. The profit earned in this way is divided between the two sides. Hence, Mozarebeh contract at bank is concluded only for trade and business issues of sale and purchase of commercial goods. It should be noted that in Mozarebeh, the bank always provides the capital and the applicant as agent, meeting the requirement of expertise and facilities for business, accepts the responsibility for execution of task. Even provision of Mozarebeh costs by the agent cannot be a reason for changing the role of the bank and the agent.
Duration of contract: Mozarebeh contracts are valid in proportion of duration for purchase and sale of goods subject of transaction. Under any condition, contract of mozarebeh is valid for maximum one year.
- It should be easily purchasable.
- It should not be perishable and luxurious.
- Goods purchased shall be exactly sold.
- The goods subject of transaction should be related to type of activity of natural agent (business license) and legal entity (line of activity of companies).
Conditions and obligations of Agent:
Further to meeting the general conditions of transaction such as eligibility, intention and inclination, the agent should also meet the following requirements for conclusion of mozarebeh contract:
- Trustworthiness and credibility;
- Expertise in business;
- Required documents and permits;
- No previous liabilities and obligations;
- Credit capacity (loan facilities of mozarebeh are paid in consideration of capacity and eligibility of customers, their executive facilities in sale and purchase of goods subject of mozarebeh and refund of liabilities created on due and appointed dates);
- Holding a current account with desirable turnover based on specified regulations and criteria;
- Private sector may benefit from loan facilities of mozarebeh in domestic business and export.
- Duration of mozarebeh contracts is in proportion of duration of sale and purchase of goods subject of transaction and it is valid for maximum one year. Exceeding periods require the respective license of the Central Bank.
- Maximum duration of using mozarebeh capital is given as 2/3 duration of contract.
- The agent , depending on nature of subject of mozarebeh contract, may gradually or entirely use the amount of capital fixed upon agreement of the bank.
- All sums of money earned through sale of goods by the agent should paid to the account of the bank and settled before termination of the said contract.
- The agent should pay all amounts received from sale of goods subject of mozarebeh to the bank account without delay.
- The agent is not authorized to act upon sale and purchase on credit.
- Goods should be sold according to the corresponding list and written invoices.
- Check of loan facilities is issued to the account of seller of goods. The agent shall submit the main invoice of transaction or receipt of warehouse or shipment bill of lading or any other document confirming delivery of goods to the bank within maximum fixed period (15 days as of the corresponding date) of using the capital.
- Prior to expiration of contract, the agent should pay the share of the bank to its account (principal amount and interest thereof).
Requirements for payment of loan facilities:
Holding a current account;
*It should be noted that payment of loan facilities to the customers with records of correspondence with the bank is pending on sufficient credit.
Amount of loan facilities: 100% proforma invoice;
(Proforma invoice is issued to the agent (recipient of loan facilities) and original copy of the invoice is issued to the bank).
- Price of goods
- Insurance charges
*Insurance charges start as of date of sale (purchase by the agent) including insurance from the origin to destination. Goods should be insured for all risk insurance in the favor of the bank. Insurance of goods during its storage at warehouse and shipment insurance from the warehouse to the customs administration to delivery of goods to the buyer is mandatory.
- Shipment costs
*Shipment costs, all transfer costs of goods from the venue for purchase to place of sale including internal shipment fee from the customs administration to the warehouse and intra-urban shipment from place of delivery by the seller to the warehouse of the agent and/or from the place of delivery of goods to the warehouse of the agent are calculated according to the respective bill of lading. Discharging and loading charges are excluded from acceptable costs.
- Warehousing costs
*Warehousing costs are put forth with respect to foreign commerce. Warehousing costs for ports and customs administrations for maximum two months and for aerial customs administration for maximum one month will be accepted. In case of storage of goods subject of mozarebeh at warehouse belonging to the agent, it is not possible to pay the warehousing charges.
- Bank fees
- Order registration fees
*Order registration fees the commission fee for opening an L/C to be paid to the Central Bank.
7- Customs costs and commercial interest
*Customs costs and commercial interest refer to all charges that are received in connection with import and export of goods through customs under different titles which are not subject to customs fines and/or miscellaneous costs of discharge either.
8- Packaging costs
*Packaging costs refer to the goods which are not offered to market in bulk and they should be packaged in smaller units and then offered.
9- Deposit of Central Bank
*Deposit of Central Bank refers to opening the L/Cs that should be paid to the Central Bank until release of goods in trust.
Acceptable pledges for mozarebeh facilities:
*Pledges will be received as equal as at least 120% mozarebeh and proportional share of interest of bank.
Securities such as long-term deposits, sold partnership bonds sold by Bank Maskan;
Local and foreign bank letters of guarantee, receipts of public warehouses, valid promissory notes and other immovable property, other items:
Mozarebeh facilities can not be granted once again to the customers whose two loan facilities of Mozarebeh are cancelled by the bank due to violating the fulfillment of contract conditions and failure to fulfill the obligations by the agent. Private sector may benefit from Mozarebeh facilities for domestic and foreign commerce. Banks are not allowed to enter into mozarebeh contract with private sector for import. Governmental and government-affiliated companies may benefit from Mozarebeh facilities in all domestic and foreign commerce regarding all fields of business. Conclusion of mozarebeh transactions with customers is allowed if by virtue of investigations carried out, return of capital and expected interest of bank are ensured. Bank Maskan will supervise over consumption of cash sum (resources) and executive operations of mozarebeh.