ACIS X BHD, a large conglomerate in Country M, has been awarded a project to updrage the
Question:
ACIS X BHD, a large conglomerate in Country M, has been awarded a project to updrage the internet facilitites into high-speed network bandwith at the government office nationwide. The project cost is estimated around RM15 mil and installation period is within 1.5 years. ACIS X BHD has made a deal with Islamic Bank ZZZ to provide 3 years financing for its working capital. Repayment will be made on bullet payment basis. The payment from government will be received in stages within 3 years after the tender award.
However, Bank ZZZ still has a concern on default risk even it is a government project. As a Bank ZZZ relationship manager, you are assigned to handle this deal:
Explain the Shariah concern in the proposed structure and suggest the solution?