Murabahah sale in practice: procedure and issues in consumer and trade financing

In Murabahah financing practised by Islamic financial institutions, instead of extending a loan facility to the client for purchasing commodities required by him, the Islamic bank purchases the commodity from the supplier first and thereafter sells it to the client usually on deferred payment basis,...

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Main Author:	Sadique, Muhammad Abdurrahman
Format:	Conference or Workshop Item
Language:	English
Published:	Global Academic Excellence (GAE) 2017
Subjects:	HG1501 Banking HG3368 Islamic Banking and Finance KBP Islamic Law KBP639 Muʻāmalāt
Online Access:	http://irep.iium.edu.my/60210/ http://irep.iium.edu.my/60210/ http://irep.iium.edu.my/60210/27/60210-MURABAHAH%20SALE%20IN%20PRACTICE-Procedure.pdf

id	iium-60210
recordtype	eprints
spelling	iium-602102018-06-29T00:52:32Z http://irep.iium.edu.my/60210/ Murabahah sale in practice: procedure and issues in consumer and trade financing Sadique, Muhammad Abdurrahman HG1501 Banking HG3368 Islamic Banking and Finance KBP Islamic Law KBP639 Muʻāmalāt In Murabahah financing practised by Islamic financial institutions, instead of extending a loan facility to the client for purchasing commodities required by him, the Islamic bank purchases the commodity from the supplier first and thereafter sells it to the client usually on deferred payment basis, at an agreed fixed price comprising the cost incurred by the bank and an additional margin of profit. In the context of financing, Murabahah takes the form of a complex procedure comprising several transactions, reflecting several relationships between the parties involved. Being a mode of sale, all rules and conditions that are relevant to sale transactions remain applicable in Murabahah even when it is used for financing purposes. Murabahah is commonly used to finance the purchase of assets in a variety of forms, including financing consumer items as well as in trade financing, both through local purchase as well as import. A study of the procedural aspects of Murabahah would reveal that its proper implementation in a financing context is challenging. In order to overcome issues arising in Murabahah based financing, implementation of equity based modes such as Musharakah should be attempted where possible, such as in the context of trade financing. The current paper analyses important aspects involved in the application of Murabahah in the above areas, scrutinising practical aspects that are required to be carefully observed for the validity of the procedure in shari‘ah. Global Academic Excellence (GAE) 2017 Conference or Workshop Item PeerReviewed application/pdf en http://irep.iium.edu.my/60210/27/60210-MURABAHAH%20SALE%20IN%20PRACTICE-Procedure.pdf Sadique, Muhammad Abdurrahman (2017) Murabahah sale in practice: procedure and issues in consumer and trade financing. In: International Conference on Social Sciences, Humanities and Technology (ICSHT 2017), 2nd–3rd December 2017, Kelantan, Malaysia. https://www.facebook.com/events/473322066377534/
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HG1501 Banking HG3368 Islamic Banking and Finance KBP Islamic Law KBP639 Muʻāmalāt
spellingShingle	HG1501 Banking HG3368 Islamic Banking and Finance KBP Islamic Law KBP639 Muʻāmalāt Sadique, Muhammad Abdurrahman Murabahah sale in practice: procedure and issues in consumer and trade financing
description	In Murabahah financing practised by Islamic financial institutions, instead of extending a loan facility to the client for purchasing commodities required by him, the Islamic bank purchases the commodity from the supplier first and thereafter sells it to the client usually on deferred payment basis, at an agreed fixed price comprising the cost incurred by the bank and an additional margin of profit. In the context of financing, Murabahah takes the form of a complex procedure comprising several transactions, reflecting several relationships between the parties involved. Being a mode of sale, all rules and conditions that are relevant to sale transactions remain applicable in Murabahah even when it is used for financing purposes. Murabahah is commonly used to finance the purchase of assets in a variety of forms, including financing consumer items as well as in trade financing, both through local purchase as well as import. A study of the procedural aspects of Murabahah would reveal that its proper implementation in a financing context is challenging. In order to overcome issues arising in Murabahah based financing, implementation of equity based modes such as Musharakah should be attempted where possible, such as in the context of trade financing. The current paper analyses important aspects involved in the application of Murabahah in the above areas, scrutinising practical aspects that are required to be carefully observed for the validity of the procedure in shari‘ah.
format	Conference or Workshop Item
author	Sadique, Muhammad Abdurrahman
author_facet	Sadique, Muhammad Abdurrahman
author_sort	Sadique, Muhammad Abdurrahman
title	Murabahah sale in practice: procedure and issues in consumer and trade financing
title_short	Murabahah sale in practice: procedure and issues in consumer and trade financing
title_full	Murabahah sale in practice: procedure and issues in consumer and trade financing
title_fullStr	Murabahah sale in practice: procedure and issues in consumer and trade financing
title_full_unstemmed	Murabahah sale in practice: procedure and issues in consumer and trade financing
title_sort	murabahah sale in practice: procedure and issues in consumer and trade financing
publisher	Global Academic Excellence (GAE)
publishDate	2017
url	http://irep.iium.edu.my/60210/ http://irep.iium.edu.my/60210/ http://irep.iium.edu.my/60210/27/60210-MURABAHAH%20SALE%20IN%20PRACTICE-Procedure.pdf
first_indexed	2023-09-18T21:25:21Z
last_indexed	2023-09-18T21:25:21Z
_version_	1777412154684604416

Murabahah sale in practice: procedure and issues in consumer and trade financing

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