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Murabaha (accurate transliteration murābaḥa, Arabic مرابحه) is defined as a particular kind of sale, compliant with shariah, where the seller expressly mentions the cost he has incurred on the commodities to be sold and sells it to another person by adding some profit or mark-up thereon which is known to the buyer. Fiqh ( Arabic: فقه, fɪqəh is Islamic Jurisprudence. Fiqh is an expansion of the Sharia Islamic law—based directly on the An academic discipline or field of study is a branch of Knowledge which is taught or Researched at the college or university level This is a sub-article to Religious education, Academic discipline, and Islam. This is a sub-article of Fiqh and Law and economics. Islamic economics is Economics in accordance with Islamic law This is a sub-article of Islamic economical jurisprudence. Zakaat ( زكاة zækæːh zakaat or zakāh, has the implied Under Islamic law, jizya or jizyah (جزْية ʤɪzjæh Ottoman Turkish: cizye both derived from Pahlavi and ultimately from Aramaic In Sharia (Islamic Jurisprudence) nisab (نصاب is the amount which savings or capital or product must exceed in order for the Muslim owner to be obliged Khums ( خمس xʊms is the Arabic word for One Fifth (1/5 According to Shia Islamic legal terminology it means "one-fifth of certain items which a person This is a sub-article of Zakat, Infaq and Mustahabb. Sadaqah (plural sadaqat) ( صدقة, sˤɒdæqɒh is an A waqf ( plural, awqāf; vakıf wæqəf is an inalienable religious endowment in Islam, typically devoting a building or plot of land for Muslim Bayt al-Mal, AKA Bayt al-Mal Lil Muslimeen is a Hezbollah -controlled organization that performs financial services for the organization Islamic banking refers to a system of banking or banking activity that is consistent with Islamic law ( Sharia) principles and guided by Islamic economics Riba ( Arabic: ربا rɪbæː means Usury and is forbidden in Islamic economic jurisprudence. Takaful is an Islamic Insurance concept which is grounded in Islamic muamalat (banking transactions observing the rules and regulations of Islamic Sukuk ( Arabic: صكوك plural of صك Sakk "legal instrument deed check" is the Arabic name for a financial Certificate but can be seen This is a sub-article to Islamic economical jurisprudence and Inheritance. This is a sub-article of Islamic economic jurisprudence and Muslim world. See also Modern Islamic philosophy, Islamism, Islamic terrorism Political aspects of Islam are derived from the Quran, the Sunna In Islamic law Marriage ("ʿurs" عرس is a legal bond and Social contract between a man and a woman as prompted by the Shari'a. This is a sub-article of Fiqh and Criminal law. Islamic criminal law (فقه العقوبات is Criminal law in accordance This is a sub-article of Islamic jurisprudence and Etiquette. This is a sub-article to Islamic jurisprudence and Islamic theology. This is a sub-article to Fiqh and Hygiene Hygiene is a prominent topic in Islam. Islamic military jurisprudence consists of the basic laws governing the conduct of the military aspects of Jihad (also known as "lesser Jihad " Sharia ( Arabic: ar شريعة) is the body of Islamic Religious law. As the requirement includes an 'honest declaration of cost', murabaha is one of three types of bayu-al-amanah ('fiduciary' sale)[Other two types of bayu-al-amanah are Tawliyah (sale at cost) and Wadiah (sale at specified loss)].
It is one of the most popular modes used by banks in Islamic countries to promote riba-free transactions. Riba ( Arabic: ربا rɪbæː means Usury and is forbidden in Islamic economic jurisprudence. The ratio in which this instrument is being used varies from bank to bank. Typically Murabaha is used in asset financing, Property, Micro Finance as well as in import / export of commodities. [1]
Use of the instrument of Murabaha is however restricted only to those cases where Mudarabah and Musharakah are not practicable. Islamic banking refers to a system of banking or banking activity that is consistent with Islamic law ( Sharia) principles and guided by Islamic economics Islamic banking refers to a system of banking or banking activity that is consistent with Islamic law ( Sharia) principles and guided by Islamic economics In reality there are risks associated with profit sharing, and banks are not guaranteed any income from these modes of financing. As a result, Murabaha with its fixed margin attached, offers lenders (ie the banks) with a more predictable income stream.
There are, however practical guidelines in place which aim to ensure that the transaction between the bank and the customer is one based on trade and not merely a financing transaction. For instance, it is a requirement that the bank takes constructive or actual possession of the good before selling to the customer. Whilst it can be justified to charge an additional margin to the customer to reflect the time value of money in terms of actual payment not being received from the customer at time zero, any penalties for late payments can only be imposed if the bank agrees to purify this by donating this to charity.
The accounting treatment of Murabaha and its disclosure and presentation in the financial statements also varies from bank to bank.
See also
Islamic banking refers to a system of banking or banking activity that is consistent with Islamic law ( Sharia) principles and guided by Islamic economicsDapyx Software network: MP3 Explorer | Ebook Manager | Zenithic