ISLAMIC

BANKING
DBN 4013

MuRAbaHAh
UMIE ZAHIRAH BINTI AMIR MUZZAFAR

21220355
 What is murabahah ?
Murabaha is a form of sale where the cost of the goods to be
sold as well as the profit on the sale is known to both parties.
The purchase and selling price and the profit margin must be
clearly stated at the time of the sale agreement. Payment of the
Murabaha price may be in spot, in installments, or in a lump sum
after a certain period of time.
 MurAbaHAh

Use of Murabaha? Example

The Murabaha form of financing is typically Consumers use Murabaha when purchasing

Used in place of loan in diverse sectors. Household appliances , cars ,or real estate.

Example
Businesses use this type of financing when
purchasing machinery , equipment ,or raw
materials.
 Example of Murabaha

Bilal would like to buy a boat that sells for $100,000 from Billy's Boat Shop.
To do so, Bilal would contact a murabaha bank, that would buy the boat
from Billy's Boat Shop for $100,000 and sell it to Bilal for $109,000, to be
paid in installments over a three year period. The amount Bilal pays is a
fixed amount to a bank that owns the asset and there is no interest charge
involved. Also, if Bilal defaults on any payments, there are no additional
charges that he would incur. The additional amount Bilal pays over the cost
price from the boat shop is in effect a 3% loan, but because it is offered as
a fixed payment without any additional costs, it is allowed by Islamic law.
PILLARS OF AL- MURABAHAH

● SELLER

● BUYER

● MERCHANDISE OR GOODS

● PRICE

● SIGHAH : OFFER (IJAB) & ACCEPTANCE (QABUL)

 CONDITIONS OF AL- MURABAHAH

Product and selling price

Product must be clearly
No riba trading shall Be involved
defined including its type, Product traded cannot be
quantity and other paid by barter system from
descriptions ribawi item.
Contracting parties
Both must be adults ,
rational, intelligent and can
be held accountable.
 CONDITIONS OF AL- MURABAHAH

Offer and acceptance

It shall contain the two
The initial contract must be valid
importance elements The traded item or property
mentione i.e Cost price and muet be lawfully owned by
rate of profit. the seller according to
shariah requirements