Murabahah
Murabahah is a sale in which the seller discloses the item's cost and adds an agreed profit margin. Banks often use it as a financing structure, buying an item and reselling it to a customer at a markup. Its validity depends on the bank owning the item first, usually paid back in installments.
Often appears in
See the term in context
Is it permissible, Islamically, to finance the purchase of a bus through an Islamic murabahah from a bank, where the bank finances part of the price and a specific murabahah rate is agreed upon, with the bank purchasing and owning the bus before selling it to us in installments, and the bank bearing responsibility for the bus during the transitional period, in addition to paying a guarantee fee to an external party, and mortgaging the bus to the bank without imposing late payment penalties?
The answer can be summarized as follows: 1 and 2 - If the bank is to purchase the remaining 70% of the bus and sell it on a Murabaha basis, there is no harm in that. However, if you are paying part of the price (3000)…
What is the ruling on purchasing a residential unit under construction from Al-Handhal Company within the Tamkeen initiative, knowing that the price of the unit is predetermined, and the buyer pays two upfront installments to the company, and the bank finances an amount of $76,000 transferred directly to the company, and the amount is repaid to the bank in monthly installments without increase, with a 1% annual murabahah clause between the company and the bank?
The involvement of a bank in a contract between a buyer and a seller can take two forms: First: The bank acts as a lender to the buyer. If the loan involves usurious interest (riba), then it is not…
Is buying a commodity in installments in the following manner permissible: The customer approaches the bank to obtain a Murabahah card, and signs a contract that includes authorizing the customer to purchase the commodity in the bank's name, provided that the commodity conforms to the principles of Islamic finance? The customer then buys it with the card as an agent for the bank, and the bank immediately sells it to the customer on a Murabahah basis?
The Murabaha card was a subject of discussion at the Islamic Fiqh Academy, where Dr. Muhammad Ali Al-Qari proposed a formula for it based on the bank authorizing the customer to purchase, and then to sell to himself as…
Questions that use it
Is it permissible to take out a loan from an Islamic bank, either a benevolent loan (qard hasan) or a murabahah loan, at an annual rate of 6% to pay off the apartment installment, contribute to building a plot of land, and settle the wife's debt, or is borrowing restricted to necessities only?
What is the difference between an agreement to purchase (muwa'adah) and a promise to purchase (wa'd) in Murabahah for the one who commands the purchase, and how can the option [to proceed or not] in the agreement be reconciled with the binding nature of the promise?
What is the ruling on borrowing from "HSBC Qatar" Bank—which offers Islamic financing through Tawarruq and Murabahah, and buys and sells copper to the client in installments—for the purpose of investment and partially for marriage?