{{Short description|Type of Islamic finance}} {{Distinguish|Murabba}} {{Fiqh |economic}} {{Use dmy dates|date=September 2023}} '''''Murabaḥah''''', '''''murabaḥa''''', or '''''murâbaḥah''''' ({{langx|ar|مرابحة}}, derived from ''ribh'' {{langx|ar|ربح}}, meaning profit) was originally a term of ''fiqh'' (Islamic jurisprudence) for a sales contract where the buyer and seller agree on the markup (profit) or "cost-plus" price<ref name="Irfan-2015-135">{{cite book|last1=Irfan|first1=Harris|title=Heaven's Bankers|date=2015|publisher=Overlook Press|page=135}}</ref> for the item(s) being sold.<ref name=Usmani-65>{{cite book|last1=Usmani|first1=Taqi|title=An Introduction to Islamic Finance|publisher=Creative Commons Attribution-No Derivative Works 3.0.|page=65|url=https://books.google.com/books?id=0aDStX-qUAgC&q=Murabahah&pg=PA65|access-date=4 August 2015|year=1998}}</ref> In recent decades it has become a term for a very common form of Islamic (i.e., "shariah-compliant") financing, where the price is marked up in exchange for allowing the buyer to pay over time—for example with monthly payments (a contract with deferred payment being known as ''bai-muajjal''). ''Murabaha'' financing is basically the same as a rent-to-own arrangement in the non-Muslim world, with the intermediary (e.g., the lending bank) retaining ownership of the item being sold until the loan is paid in full.<ref name=Investopedia>{{cite web |title=Murabaha |url=http://www.investopedia.com/terms/m/murabaha.asp |website=Investopedia |access-date=3 August 2015}}</ref> There are also Islamic investment funds and ''sukuk'' (Islamic bonds) that use ''murabahah'' contracts.<ref name="FJIFD2012:220-221">Jamaldeen, ''Islamic Finance For Dummies'', 2012:188-9, 220-1</ref>
The purpose of ''murabaha'' is to finance a purchase without involving interest payments, which most Muslims (particularly most scholars) consider ''riba'' (usury) and thus ''haram'' (forbidden).<ref name=IFIM /> ''Murabaha'' has come to be "the most prevalent"<ref name=IFIM /> or "default" type of Islamic finance.<ref name="Irfan-2015-139">{{cite book|last1=Irfan|first1=Harris|title=Heaven's Bankers|date=2015|publisher=Overlook Press|page=139}}</ref>
A proper ''murâbaḥah'' transaction differs from conventional interest-charging loans in several ways. The buyer/borrower pays the seller/lender at an agreed-upon higher price; instead of interest charges, the seller/lender makes a religiously permissible "profit on the sale of goods".<ref name=IFIM>{{cite book|title=Islamic Finance: Instruments and Markets|date=2010|publisher=Bloomsbury Publishing|page=131|url=https://books.google.com/books?id=YxPVBAAAQBAJ&q=Murabahah&pg=PA131|access-date=4 August 2015|isbn=9781849300391}}</ref><ref>{{cite web|url=http://www.mohammedamin.com/Islamic_finance/Simple-introduction-to-Islamic-mortgages.html|title=A Simple Introduction to Islamic Mortgages|date=14 May 2015}}</ref> The seller/financer must take actual possession of the good before selling it to the customer, and must assume "any liability from delivering defective goods".<ref name=IMF-2015-8 /> Sources differ as to whether the seller is permitted to charge extra when payments are late,<ref>{{cite web |title=Late Payment Charges for Islamic Financial Institutions|url=https://islamicbankers.me/focus/late-payment-charges-tawidh-gharamah/ |website=Islamic Bankers : Resource Centre|date=11 June 2014 |access-date=9 July 2016}}</ref> with some authors stating any late fees ought to be donated to charity,<ref name="Edward Elgar">{{cite book |editor1-last=Visser|editor1-first=Hans|title=Islamic Finance: Principles and Practice|publisher=Edward Elgar|page=77|chapter-url=https://books.google.com/books?id=KIXe3rY_OkgC&q=murabaha+impose+penalties+for+late+payment+charity&pg=PA77|access-date=9 July 2016|chapter=4.4 Islamic Contract Law|date=January 2009|isbn=9781848449473|quote=The prevalent position, however, seems to be that creditors may impose penalties for late payments, which have to be donated, whether by the creditor or directly by the client, to a charity, but a flat fee to be paid to the creditor as a recompense for the cost of collection is also acceptable to many fuqaha.}}</ref><ref name="kettell-38">{{cite book|last1=Kettell|first1=Brian|title=The Islamic Banking and Finance Workbook: Step-by-Step Exercises to help you ...|date=2011 |publisher=Wiley|page=38 |url=https://books.google.com/books?id=lLVVRAqvZZIC&q=murabaha+impose+penalties+for+late+payment&pg=PA38|access-date=9 July 2016 |quote=The bank can only impose penalties for late payment by agreeing to `purify` them by donating them to charity.|isbn=9781119990628}}</ref><ref name="al-yusr">{{cite web|title=FAQs and Ask a Question. Is it permissible for an Islamic bank to impose penalty for late payment?|url=http://www.alyusr.om/faq.aspx?id=15|website=al-Yusr|access-date=9 July 2016|archive-date=6 August 2016|archive-url=https://web.archive.org/web/20160806175919/http://www.alyusr.om/faq.aspx?id=15|url-status=dead}}</ref> or not collected unless the buyer has "deliberately refused" to make a payment.<ref name=IMF-2015-8 /> For the rate of markup, ''murabaha'' contracts "may openly use" ''riba'' interest rates such as LIBOR "as a benchmark", a practice approved of by the scholar Taqi Usmani.<ref name="Visser-2013-66">{{cite book|last1=Visser|first1=Hans|title=Islamic Finance: Principles and Practice|date=2013|publisher=Elgar Publishing|page=66|edition=Second|url=https://books.google.com/books?id=Y30tAgAAQBAJ&q=difference+between+Bai-muajjal+and+Murabaha&pg=PA66|access-date=7 December 2016|isbn=9781781001745}}</ref>{{#tag:ref|Faleel Jamaldeen insists that using LIBOR as a benchmark "doesn't mean that Islamic banks were charging an interest rate; they simply got guidance" from that rate of interest. Furthermore in late 2011 an Islamic Interbank Rate (IIBR) was developed and should "alleviated this source of controversy".<ref name="FJIFD2012:156">Jamaldeen, ''Islamic Finance For Dummies'', 2012:156</ref> (see also "Thomson Reuters' "Islamic Interbank Benchmark Rate" -- IIBR. Is it really an important Step Forward for Islamic Finance Authenticity?")<ref name="TRIIBR">{{cite web|title=Thomson Reuters' "Islamic Interbank Benchmark Rate" -- IIBR. Is it really an important Step Forward for Islamic Finance Authenticity?|url=https://islamicmarkets.com/publications/islamic-interbank-benchmark-rate-iibr|website=Islamicmarkets.com|access-date=15 April 2018}}</ref>|group=Note}} thumb|Islamic Finance schematic diagram Conservative scholars promoting Islamic finance consider ''murabaha'' to be a "transitory step" towards a "true profit-and-loss-sharing mode of financing",<ref name="Irfan-2015-136" /> and a "weak"<ref>{{cite book|title=Dialogue in Islamic Economics|last=Siddiqui|first=M.N.|publisher=Institute of Policy Studies|year=2002|location=Islamabad|pages=175}}</ref> or "permissible but undesirable"<ref name=MOFRIEI2005:35-6>Farooq, ''Riba-Interest Equation and Islam'', 2005: p.35-6</ref> form of finance to be used where profit-and-loss-sharing is "not practicable."<ref name="Irfan-2015-136">{{cite book|last1=Irfan|first1=Harris|title=Heaven's Bankers|date=2015|publisher=Overlook Press|page=136}}</ref><ref name=Usmani-107>{{cite book|last1=Usmani|first1=Taqi|title=An Introduction to Islamic Finance|publisher=Creative Commons Attribution-No Derivative Works 3.0.|page=107|url=https://books.google.com/books?id=0aDStX-qUAgC&q=Murabahah&pg=PA65 |access-date=4 August 2015 |quote=Therefore, it [''Murabahah''] should neither be taken as an ideal Islamic mode of financing, nor a universal instrument for all sorts of financing. It should be taken as a transitory step towards the ideal Islamic system of financing based on ''musharakah'' or ''mudarabah''.|year=1998}}</ref> Critics/skeptics complain/note that in practice most "''murabaḥah''" transactions are merely cash-flows between banks, brokers, and borrowers, with no buying or selling of commodities;<ref name=mmhi-2008 /> that the profit or markup is based on the prevailing interest rate used in ''haram'' lending by the non-Muslim world;<ref name=Usmani-81>{{cite book|last1=Usmani|first1=Taqi|title=An Introduction to Islamic Finance|publisher=Creative Commons Attribution-No Derivative Works 3.0.|page=81|url=https://books.google.com/books?id=0aDStX-qUAgC&q=Murabahah&pg=PA65|access-date=4 August 2015|year=1998}}</ref> that "the financial outlook" of Islamic ''murabaha'' financing and conventional debt/loan financing is "the same",<ref>{{usurped|1=[https://web.archive.org/web/20080910003541/http://hazariba.com/Murabaha_Financing_VS_Lending_on_Interest.pdf Murabaha Financing VS Lending on Interest]}}| Qazi Irfan |July 22, 2008 | Social Science Research Network</ref> as is most everything else besides the terminology used.<ref name=kayali-MHoH />
==Religious justification== While orthodox Islamic scholars have expressed a lack of enthusiasm for ''murabaha'' transactions,<ref name="KH-CS">{{cite web|url=http://www.khalidzaheer.com/qa/109|title=Is charging more on credit sales (Murabaha) permissible?|website=Khalid Zaheer|access-date=31 August 2016}}</ref> calling them "no more than a second best solution" (Council of Islamic Ideology)<ref name="KH-CS" /> or a "borderline transaction" (Islamic scholar Taqi Usmani),<ref name=MTUHJI1999:227>Usmani, ''Historic Judgment on Interest'', 1999: para 227</ref> nonetheless they are defended as Islamically permitted.
According to Taqi Usmani, the reference to permitted "trade" or "trafficking" in Quran verse 2:275:<ref>{{cite web|url=https://quran.com/2:275|title=Surah Al-Baqarah [2:275]|website=Surah Al-Baqarah [2:275]|access-date=11 April 2018}}</ref>
{{blockquote|''"... they say, 'Trafficking (trade) is like usury,' [but] God has permitted trafficking, and forbidden usury .."''}} refers to credit sales such as ''murabaha'', the "forbidden usury" refers to charging extra for late payment (late fees), and the "they" refers to non-Muslims who didn't understand why if one was allowed both were not:<ref name=MTUHJI1999:50,51,219>Usmani, ''Historic Judgment on Interest'', 1999: paras 50, 51, 219</ref>
<blockquote> the objection of the infidels ... was that when they increase the price at the initial stage of sale, it has not been held as prohibited but when the purchaser fails to pay on the due date, and they claim an additional amount for giving him more time, it is termed as "riba" and haram. The Holy Qur'an answered this objection by saying: "Allah has allowed sale and forbidden riba."<ref name=MTUHJI1999:219>Usmani, ''Historic Judgment on Interest'', 1999: para 219</ref></blockquote>
Usmani states that while it may appear to some people that allowing a buyer more time to pay for some product/commodity (deferred payment) in exchange for their paying a higher price is effectively the same as paying interest on a loan,<ref name=MTUHJI1999:223>Usmani, ''Historic Judgment on Interest'', 1999: para 223</ref> this is incorrect. In fact, just as a buyer may pay more for a product/commodity when the seller has a cleaner shop or more courteous staff, so too the buyer may pay more when given more time to complete payment for that product or commodity.<ref name=MTUHJI1999:223 /> When this happens, the extra they pay is not ''riba'' but just "an ancillary factor to determining the price". In such a case, according to Usmani, the "price is against a commodity and not against money" — and so permitted in Islam.<ref name=MTUHJI1999:225 /> When a credit transaction is made ''without'' the purchase of a specific commodity or product, (i.e. a loan is made charging interest), the added charge for deferred payment is for "nothing but time", and so is forbidden ''riba''.<ref name=MTUHJI1999:225>Usmani, ''Historic Judgment on Interest'', 1999: para 225</ref> However according to another Islamic finance promoter—Faleel Jamaldeen -- "murabaha payments represent debt" and because of that are not "negotiable or tradable" as Islamic finance instruments, making them (according to Jamaldeen) unpopular among investors.<ref name="FJIFD2012:220">Jamaldeen, ''Islamic Finance For Dummies'', 2012:220</ref>
Hadith also supports use of credit-sales transactions such as ''murabaḥa''. Another scholar, M.O.Farooq, states "it is well-known and supported by many hadiths that the Prophet had entered into credit-purchase transactions (''nasi'ah'') and also that he paid more than the original amount" in his repayment.<ref name=MOFRI6H2009:112>Farooq, ''Riba, Interest and Six Hadiths'', 2009: p.112</ref>{{#tag:ref|Sahih al-Bukhari, Vol. 3, #282, Narrated [A'ishah: “The Prophet purchased food grains from a Jew on credit and mortgaged his iron armur to him”. (ishtara ta[aman min yahudi ila ajalin wa rahnahu dir[an min hadid; in al-Bukhari, Vol. 3, #309 the hadith is narrated with nasi’ah, instead of ajal)|group=Note}}{{#tag:ref|Sahih al-Bukhari, Vol. 3, #579, Narrated Jabir bin [Abdullah: “I went to the Prophet while he was in the Mosque. (Mis[ar thinks that Jabir went in the forenoon.) After the Prophet told me to pray two rak[ah, he repaid me the debt he owed me and gave me an extra amount”.|group=Note}}
Usmani states that "this position" is accepted "unanimously" by the "four [ Sunni ] schools" of Islamic law and "the majority" of the Muslim jurists.<ref name=MTUHJI1999:227 /> ''Murabahah'' and related fixed financing has been approved by a number of government reports in the Islamic Republic of Pakistan on how to eliminate Interest. {{#tag:ref| *"The first comprehensive report in this respect was submitted by the Council of Islamic Ideology in 1980. *"The second report was that of the Commission for Islamization of Economy, constituted under the Shariat Act. This Commission has submitted its comprehensive report to the government in 1991. *"Lastly, the same Commission was reconstituted under the Chairmanship of Raja Zafarul Haq which submitted its final report in August 1997."<ref name=MTUHJI1999:228>Usmani, ''Historic Judgment on Interest'', 1999: para 228</ref>|group=Note}}
;Late payment Usmani presents a theory of why sellers are allowed to charge for providing credit to the lender/buyer, but are guilty of ''riba'' when charging for late payment. In a true (non-riba) ''murâbaḥah'' transaction (Usmani states) "the whole price ... is against a commodity and not against money" and so "... once the price is fixed, it relates to the commodity, and not to the time". Consequently "the price will remain the same and can never be increased by the seller." If the price had "been against time", (which is forbidden) "it might have been increased, if the seller allows ... more time" for repayment when the bill is past due.<ref name=MTUHJI1999:224>Usmani, ''Historic Judgment on Interest'', 1999: para 224</ref>
(Usmani and other Islamic finance scholars<ref name=IMF-2015-8 /><ref name="Parker-2010" /> agree that not being able to penalize a lender/buyer for late payment has led to late payments in ''murâbaḥah'' and other Islamic finance transactions. Usmani states that a "problem" of ''murabahah'' financing is that "if the client defaults in payment of the price at the due date, the price cannot be increased".<ref name=IIFTU1998:91>Usmani, ''Introduction to Islamic Finance'', 1998: p.91</ref> According to one source (Mushtak Parker), Islamic financial institutions "have long tried to grapple with the issue of delayed payments or defaults, but thus far there is no universal consensus across jurisdictions in this respect."<ref name="Parker-2010">{{cite web |last1=PARKER |first1=MUSHTAK |title=Payment delays and defaults |url=http://www.arabnews.com/node/349438 |website=Arab News |access-date=2 December 2016|date=5 July 2010}}</ref>)
==Islamic finance, use, variations== ;Limits of use in fiqh In its 1980 ''Report on the Elimination of Interest from the Economy'',<ref name="Ali-2015">{{cite journal |last1=Ali |first1=Muhammad Aqib |title=The Roots & Development of Islamic Banking in the World & in Pakistan |url=http://klibel.com/wp-content/uploads/2015/08/KLIBEL7_Acc__33-formatted.pdf |journal=Proceeding - Kuala Lumpur International Business, Economics and Law Conference 7, Vol. 1, August 15–16, 2015 |isbn=978-967-11350-6-8 |access-date=22 September 2017 |page=122}}</ref> the Council of Islamic Ideology of Pakistan stated that ''murabahah'' should *be undertaken only when the borrower wants to borrow to purchase a some item *must involve **the item being purchased by the bank;<ref name=MTUHJI1999:190 /> **coming under the ownership and possession of the bank;<ref name=MTUHJI1999:190 /> **which must assume the risk for that item;<ref name=MTUHJI1999:190 /> *the item then being sold to the customer through a valid sale;<ref name=MTUHJI1999:190>Usmani, ''Historic Judgment on Interest'', 1999: para 190</ref> *be used to the "minimum extent" and *only in cases where profit and loss sharing is not practicable.<ref name=MTUHJI1999:190 />
''Murâbaḥah'' is one of three types of ''bayu-al-amanah'' (fiduciary sale), requiring an "honest declaration of cost". (The other two types are ''tawliyah''—sale at cost—and ''wadiah''—sale at specified loss.)
According to Taqi Usmani "in exceptional cases" an Islamic bank or financial institution may lend cash to the customer for a murâbaḥah, but this is when the customer is acting as an ''agent'' of the bank in buying the good the customer needs financed. <blockquote>[W]here direct purchase from the supplier is not practicable for some reason, it is also allowed that he makes the customer himself his agent to buy the commodity on his behalf. In this case the client first purchases the commodity on behalf of his financier and takes its possession as such. Thereafter, he purchases the commodity from the financier for a deferred price.<ref name=IIFTU1998:73>Usmani, ''Introduction to Islamic Finance'', 1998: p.73</ref></blockquote>
The idea that the seller may not use murâbaḥah if profit-sharing modes of financing such as mudarabah or musharakah are practicable, is supported by other scholars that those in the Council of Islamic Ideology.<ref name="Irfan-2015-136" /><ref name=Usmani-107 />
;Limits of use in practice But these involve risks of loss, profit-sharing modes of financing cannot guarantee banks income. ''Murabahah'', with its fixed margin, offers the seller (i.e. the bank/financier) a more predictable income stream. One estimate is that 80% of Islamic lending is by ''murabahah''.<ref name=Haltom2014>{{cite web|last1=Haltom|first1=Renee|title=Econ Focus. Islamic Banking, American Regulation (Second Quarter 2014)|url=https://www.richmondfed.org/publications/research/econ_focus/2014/q2/feature1|website=Federal Reserve Bank of Richmond|access-date=26 August 2015}}</ref> M. Kabir Hassan reports that ''murabaha'' accounts are quite profitable. As of 2005, "the average cost efficiency" for ''murabaha'' was "74%, whereas average profit efficiency" even higher at 84%. Hassan states, "although Islamic banks are less efficient in containing cost, they are generally efficient in generating profit."<ref>M. Kabir Hassan. "The Cost, profit and X-efficiency of Islamic Banks," 12th Annual Conference of Economic Research Forum, Egypt, 19–21 December 2005.</ref>
Islamic banker and author Harris Irfan writes that use of ''murabaha'' "has become so distorted from its original intent that it has become the single most common method of funding inter-bank liquidity and corporate loans in the Islamic finance industry."<ref name=irfan-135>{{cite book|last1=Irfan|first1=Harris|title=Heaven's Bankers: Inside the Hidden World of Islamic Finance|date=2015|publisher=Little, Brown Book Group.|page=135|url=https://books.google.com/books?id=uJ3ABAAAQBAJ&q=nizam|access-date=28 October 2015|isbn=9781472105066}}</ref> A number of economists have noted the dominance of ''murabahah'' in Islamic finance, despite its theological inferiority to profit and loss sharing.<ref name=Iqbal_Molyneux_2005>Iqbal, Munawar, and Philip Molyneux. 2005. ''Thirty years of Islamic banking: History, performance and prospects.'' New York: Palgrave Macmillan.</ref><ref name=Kuran_2004>Kuran, Timur. 2004. ''Islam and Mammon: The economic predicaments of Islamism''. Princeton, NJ; Princeton University Press</ref><ref name=Lewis_and_Al-Guad_2001>Lewis, M.K. and L.M. al-Gaud 2001. ''Islamic banking''. Cheltenham, UK and Northampton, MA, USA: Edward Elgar</ref> One scholar has coined the term "the ''murabaha'' syndrome" to describe this.<ref name=Yousef_2004>Yousef, T.M. 2004. The murabaha syndrome in Islamic finance: Laws, institutions and policies. In ''Politics of Islamic finance,'' ed. C.M. Henry and Rodney Wilson. Edinburgh: Edinburgh University Press</ref>
The accounting treatment of murâbaḥah, and its disclosure and presentation in financial statements, vary from bank to bank. If the exact cost of the item(s) cannot be or are not ascertained, they are sold on the basis of ''musawamah'' (bargaining).<ref name=IFIM /> Different banks use this instrument in varying ratios. Typically, banks use ''murabaha'' in asset financing, property, microfinance and commodity import-export.<ref>{{Cite web |url=http://www.secp.gov.pk/notification/pdf/SRO_865_IFAS_Murabaha.pdf |title=Government of Pakistan: Securities and Exchange Commission of Pakistan |access-date=2006-10-10 |archive-url=https://web.archive.org/web/20061002085451/http://www.secp.gov.pk/notification/pdf/SRO_865_IFAS_Murabaha.pdf |archive-date=2006-10-02 |url-status=dead }}</ref> The International Monetary Fund reports that, Murâbaḥah transactions are "widely used to finance international trade, as well as for interbank financing and liquidity management through a multistep transaction known as tawarruq, often using commodities traded on the London Metal Exchange" (LME).<ref name=IMF-2015-8>{{cite book |url=https://www.imf.org/external/pubs/ft/wp/2015/wp15120.pdf |title=IMF Working paper, An Overview of Islamic Finance |last1=Hussain |first1=Mumtaz |last2= Shahmoradi |first2=Asghar |last3=Turk |first3=Rima |page=8 |date=June 2015 |access-date=9 July 2016}}</ref>
The basic ''murabaha'' transaction is a cost-plus-profit purchase where the item the bank purchases is something the customer wants but does not have cash at the time to buy directly.<ref name="dummies">{{cite web|title=MAKE PURCHASES WITH COST PLUS PROFIT (MURABAHA) CONTRACTS|url=http://www.dummies.com/personal-finance/islamic-finance/make-purchases-with-cost-plus-profit-murabaha-contracts/|website=dummies.com|access-date=21 September 2016}}</ref> However, there are other ''murabaha'' transactions where the customer wants/needs cash and the product/commodity the bank buys is a means to an end. (Thus violating the requirement spelled out by Usmani and others.)
===Variations=== In addition to being used by Islamic banks, ''murabahah'' contracts have been used by Islamic investment funds (such as SHUAA Capital of Saudi Arabia and Al Bilad Investment Company),<ref name="FJIFD2012:220-221" /> and sukuk (also called Islamic bonds)(an example being a 2005 sukuk issued by Arcapita Bank sukuk in 2005).<ref name="FJIFD2012:220-221" />
====''Bay' bithaman 'ajil''==== (Also called ''Bai' muajjal''<ref>{{cite web|title=TRADE-BASED FINANCING MURABAHA (COST-PLUS SALE)|url=http://staff.uob.edu.bh/files/620922311_files/Murabaha.pdf|access-date=15 August 2017|archive-date=17 September 2011|archive-url=https://web.archive.org/web/20110917150404/http://staff.uob.edu.bh/files/620922311_files/Murabaha.pdf|url-status=dead}}</ref> abbreviated BBA, and known as credit sale or deferred payment sale). Reportedly the most popular mode of Islamic financing is cost-plus ''murabaha'' in a credit sale setting (''Bay bithaman 'ajil'') with "an added binding promise on the customer to purchase the property, thus replicating secured lending in `Shari'a compliant` manner." The concept was developed by Sami Humud, and shortly after it became popular Islamic Banking began its strong growth in the late 1970s.<ref name="MeGIFLEP2006:18">El-Gamal, ''Islamic Finance'', 2006: p.18</ref>
Another source (Skrine law firm) distinguishes between ''Murabahah'' and ''Bay' bithaman 'ajil'' (BBA) banking products, saying that in BBA disclosure of the cost price of the item being financed is not a condition of the contract.<ref name="skrine">{{cite web|last1=Isa|first1=Azrina Mohd|title=Islamic Finance Contracts & Products|url=http://www.skrine.com/islamic-finance-contracts-a-products|website=Skrine|access-date=16 August 2017}}</ref>
One variation on ''murabahah'' (known as "Murabahah to the Purchase Orderer" according to Muhammad Tayyab Raza) allows the customer to serve as the "agent" of the bank, so that the customer buys the product using the bank's borrowed funds.<ref name="IIFTU1998:73" /> The customer then repays the bank similar to a cash loan. While this is not "preferable" from a Sharia point of view, it avoids extra cost and the problem of a financial institution lacking the expertise to identify the exact or best product or the ability to negotiate a good price.<ref>{{cite web |title=Murabahah Finance |last=Raza |first=Muhammad Tayyab |publisher=Islamic Banking - ABN AMRO (Pakistan) Limited |url=http://alhudacibe.com |access-date=21 September 2017}}</ref>
====''Bay' al-Ina''==== (Also ''Bay' al-'Inah''). This simple form of ''murabahah'' involves the Islamic bank buying some object from the customer (such as their house or motor vehicle) for cash, then selling the object back to the customer at a higher price, with payment to be deferred over time. The customer now has cash and will be paying the bank back a larger sum of money over time. This resemblance to a conventional loan has led to ''bay' al-ina'' being criticized as a ruse for a cash loan repaid with interest.<ref>{{cite web|title=Glossary of Financial Terms - B|url=http://www.islamic-banking.com/glossary_B.aspx|website=Institute of Islamic Banking and Insurance|access-date=21 September 2016|archive-url=https://web.archive.org/web/20150829025808/http://www.islamic-banking.com/glossary_B.aspx|archive-date=29 August 2015|url-status=dead}}</ref> It was used by a number of modern Islamic financial institutions despite condemnation by jurists, but in recent years its use is "very much limited" according to Harris Irfan.<ref name="Irfan-2015-137" />
====''Bay' al-Tawarruq''==== right|600px|Both a Reverse Murabaha (aka ''Tawarruq'') and conventional loan provide a customer with cash in return for deterred repayment, but while a conventional loan is simpler and involves fewer fees, a ''tawarruq'' does not violate sharia law (according to some jurists).
''Tawarruq'' (also called a "reverse ''murabaha''"<ref name="FJIFD2012:156" /> and sometimes a "commodity ''murabaha"'')<ref name="CMP-Dusuki">{{cite journal |date=c. 2007 |title=Commodity Murabahah Programme (CMP): An Innovative Approach to Liquidity Management |journal=Journal of Islamic Economics, Banking and Finance |page=12 |last1=Dusuki |first1=Asyraf Wajdi}}</ref> also allows the banking customer to borrow cash instead of finance a purchase,<ref name=FKIBP2015:93>Khan, ''Islamic Banking in Pakistan'', 2015: p.93</ref> and has also been criticized by some jurists.<ref>{{Cite web|url=http://investment-and-finance.net/islamic-finance/questions/what-is-the-difference-between-bay-al-tawarruq-and-bay-al-inah.html|title=Islamic Finance {{!}} What is the Difference Between Bay' al-Tawarruq and Bay' al-Inah?|last=Bakir|first=Mohammad Majd|date=11 January 2014|website=investment-and-finance.net|language=en|access-date=2017-08-16}}</ref> Unlike a ''bay al-ina'' it involves another party in addition to the customer, Islamic bank and seller of the commodity. In ''Tawarruq'' the customer would buy some amount of a commodity (a commodity which is not a "medium of exchange" or forbidden in ''riba al-fadl'' such as gold, silver, wheat, barley, salt, etc.)<ref name="FJIFD2012:156" /> from the bank to be paid in installments over a period of time and sell that commodity on the spot market (the commodity buyer being the additional party) for cash.<ref name="Irfan-2015-137" /><ref name="WDBaT">{{cite web|title=What is the Difference Bay' al-Tawarruq and Bay' al-Inah?|url=http://investment-and-finance.net/islamic-finance/questions/what-is-the-difference-between-bay-al-tawarruq-and-bay-al-inah.html|website=Investment and Finance|access-date=9 July 2016|date=Jan 11, 2014}}</ref><ref>{{cite web|title=Fiqh Muamalat. Bay' al-Tawarruq|url=https://www.scribd.com/doc/97553119/Bay-Al-Tawarruq|website=scribd.com|publisher=Universiti Teknologi Mara|access-date=21 September 2016}}</ref> (The commodity buying and selling is usually done by the bank on behalf of the customer,<ref name="FJIFD2012:156" /> so that "all that changes hands is papers being signed and then handed back" according to one researcher).<ref name="FKIBP2015:93" /> An example would be buying $10,000 worth of copper on credit for $12,000 to be paid over two years, and immediately selling that copper to the third party spot buyer for $10,000 in cash. There are additional fees involved for the commodity purchases and sales compared to a cash loan, but the additional $2000 is considered "profit" not "interest" and so not ''haram'' according to proponents.
According to Islamic banker Harris Irfan, this complication has "not persuaded the majority of scholars that this series of transactions is valid in the Sharia."<ref name="Irfan-2015-138">{{cite book|last1=Irfan|first1=Harris|title=Heaven's Bankers: Inside the Hidden World of Islamic Finance |date=2015|publisher=Overlook Press|page=138}}</ref>{{#tag:ref| "...jurists of most schools have forbidden this transaction [tawarruq], which takes the form of multiple valid sales but does not serve the desired substance of Islamic law."<ref name="MeGIFLEP2006:63">El-Gamal, ''Islamic Finance'', 2006: p.63</ref>|group=Note}} Because the buying and selling of the commodities in ''Tawarruq'' served no functional purpose, banks/financers are strongly tempted to forgo it. Islamic scholars have noticed that while there have been "billions of dollars of commodity-based tawarruq transactions" there have not been a matching value of commodity being traded.<ref name=FT-tawarruq>{{cite web |title=Definition of tawarruq ft.com/lexicon |url=http://lexicon.ft.com/Term?term=tawarruq |website=Financial Times |access-date=9 August 2015 |archive-url=https://web.archive.org/web/20150911223058/http://lexicon.ft.com/Term?term=tawarruq |archive-date=11 September 2015 |url-status=dead }}</ref> The IMF states that "''tawarruq'' has become controversial among Shari’ah scholars because of its divergence of its use from the spirit of Islamic finance".<ref name=IMF-2015-8 /> But some prominent scholars have tolerated commodity ''murabaha'' "for the growth of the [Islamic finance] industry".<ref name="Irfan-2015-139" /> Irfan states that (at least as of 2015) Sharia boards of some banks (such as Abu Dhabi Islamic Bank), have taken a stand against ''Tawarruq'' and were "looking at 'purer' forms of funding" (such as ''mudarabah'').<ref name="Irfan-2015-226" /> To "counter the obvious violation of the spirit of the riba ban", some banks have required the complication (and expense) of two additional commodity brokers in addition to the customer and financier.<ref name=FKIBP2015:93 /><ref name="Warde 2010 144">{{cite web |title=Ibrahim Warde presentation, Panel on Islamic Finance: Bankruptcy, Financial Distress and Debt Restructuring, Islamic Finance Workshop, Harvard Law School |date=September 26, 2011 |url=http://ifpprogram.com/login/view_pdf/?file=Bankruptcy_Panel.pdf&type=lectures |archive-url=https://web.archive.org/web/20150521094130/http://ifpprogram.com/login/view_pdf/?file=Bankruptcy_Panel.pdf&type=lectures |url-status=usurped |archive-date=21 May 2015 |access-date=6 June 2017}}</ref>
On the other hand, Faleel Jamaldeen states that "commodity ''murabaha''" contracts<ref name="CMP-Dusuki" /> are used to fund short-term liquidity requirements for Islamic interbank transactions,<ref name="CMP-Dusuki" /><ref>{{Cite web|url=http://iimm.bnm.gov.my/view.php?id=72&dbIndex=0&website_id=14&ex=1216289403&md=%C3%88%E2%80%9Em%20|title=Commodity Murabahah Programme |website=iimm.bnm.gov.my}}</ref> although they may not use gold, silver, barley, salt, wheat or dates for commodities<ref name="FJIFD2012:155">Jamaldeen, ''Islamic Finance For Dummies'', 2012:155</ref> as this is forbidden under ''Riba al-Fadl''. Among the Islamic banks using ''Tawarruq'' (as of 2012) according to Jamaldeen, include the [https://www.uab.ae/ United Arab Bank], QNB Al Islamic, Standard Chartered of United Arab Emirates, and Bank Muaamalat of Malaysia.<ref name="FJIFD2012:156" />
In 2023 a couple of Capco management consultants - Przemek de Skuba and Waqaar Butt - argued that due to its structural similarities to Contractum trinius as well as its ESG alignment, commodity ''murabaha'' could regain its historic appeal among the Catholic societies, and suggested that there could be scope for lowering the associated transactional costs for the customers who do not need to adhere to Islamic Finance.<ref>{{Cite web|url=https://www.capco.com/intelligence/capco-intelligence/commodity-murabaha|title=Commodity Murabaha: An Ethical Financing Solution For All? {{!}}|last1=de Skuba|first1=Przemek|last2=Butt|first2=Waqaar|date=30 January 2023|website=capco.com|language=en|access-date=2025-11-28}}</ref>
===Legal status===
==== United States ==== In the United States the Office of the Comptroller of the Currency—which regulates nationally licensed banks—has allowed ''murabaha'':<blockquote>Interpretive Letter #867. November 1999 ... In the current financial marketplace lending takes many forms . ... murabaha financing proposals are functionally equivalent to or a logical outgrowth of secured real estate lending and inventory and equipment financing, activities that are part of the business of banking.<ref>{{Cite web|url=https://www.occ.gov/static/interpretations-and-precedents/nov99/int867.pdf|title=Interpretive Letter #867. 12 USC 24(7). 12 USC 29|date=November 1999 |website=.occ.gov|publisher=Comptroller of the Currency. Administrator of National Banks}}</ref><ref name="MeGIFLEP2006:15">El-Gamal, ''Islamic Finance'', 2006: p.15</ref></blockquote>
==Challenges and criticism== Orthodox Islamic Scholars such as Taqi Usmani emphasize that murâbaḥah should only be used as a structure of last resort where profit and loss sharing instruments are unavailable.<ref name=MTUHJI1999:227 /> Usmani himself describes ''murâbaḥah'' as a "borderline transaction" with "very fine lines of distinction" compared to an interest bearing loan, as "susceptible to misuse", and "not an ideal way of financing".<ref name=MTUHJI1999:227 /> He laments that <blockquote>Many institutions financing by way of ''murabahah'' determine their profit or mark-up on the basis of the current interest rate, mostly using LIBOR (Inter-bank offered rate in London) as the criterion.<ref name="Usmani-81" /></blockquote>
Another pioneer, Mohammad Najatuallah Siddiqui, has lamented that "as a result of diverting most of its funds towards murabaha, Islamic financial institutions may be failing in their expected role of mobilizing resources for development of the countries and communities they are serving,"<ref>{{cite book |last1=SIDDIQI |first1=Mohammad Nejatullah |title=Riba, Bank Interest, and The Rationale of Its Prohibition |url=https://uaelaws.files.wordpress.com/2012/05/riba-bank-interest-and-the-rationale-of-its-prohibition.pdf |publisher=Islamic Development Bank |series=Visiting Scholars Research Series |date=2004 |page=75 |access-date=26 November 2017 |archive-date=20 November 2016 |archive-url=https://web.archive.org/web/20161120011404/https://uaelaws.files.wordpress.com/2012/05/riba-bank-interest-and-the-rationale-of-its-prohibition.pdf |url-status=dead }}</ref> and even bringing about "a crisis of identity of the Islamic financial movement."<ref name="Siddiqi-1988">{{cite book|last1=Siddiqi|first1=Muhammad Nejatullah|editor1-last=Ariff|editor1-first=Mohamed|title=Islamic Banking in Southeast Asia: Islam and the Economic Development of ...|date=1988|publisher=Institute of Southeast Asian Studies|page=56|url=https://books.google.com/books?id=IehCi9TSYz4C&q=%22it+can+be+characterized+as+a+crisis+of+identity+of+the+Islamic+financial+movement.%22&pg=PA56|access-date=21 December 2017|isbn=9789971988982}}</ref>{{#tag:ref|M.O. Farooq,<ref name=MOFRIE-2005:35>Farooq, ''Riba-Interest Equation and Islam'', 2005: p.35</ref> quoting M. Iqbal and P. Molyneux<ref>Munawar IQBAL and Philip Molyneux. ''Thirty Years of Islamic Banking: History, Performance and Prospects'', [Palgrave, 2005], p. 125</ref> quoting M.N. Siddiqi<ref>Mohammad Nejatullah SIDDIQI. ''Issues in Islamic Banking'', [Leicester: The Islamic Foundation, UK, 1983]</ref>|group=Note}}
Some Muslims (Rakaan Kayali among others) complain that ''murabaha'' does not eliminate interest as it guarantees for itself the amount of profit it collects,<ref name=kayali-MHoH>{{cite web|last1=Kayali|first1=Rakaan|title=Murabaha: Halal or Haram?|url=https://foundationsforislamiceconomics.wordpress.com/2015/03/11/murabaha-halal-or-haram/|website=Practical Islamic Finance|date=11 March 2015}}</ref> and so amounts to a ''Ḥiyal'' or legal "trick" to defeat the intent of shariah.<ref name="Irfan-2015-137">{{cite book|last1=Irfan|first1=Harris|title=Heaven's Bankers: Inside the Hidden World of Islamic Finance |date=2015|publisher=Overlook Press|page=137}}</ref> Khalid Zaheer considers it an example of how two classical shariah-compliant contracts (''Murabahah'' and ''Bai Muajjal'') can be combined to form a contract that is not compliant.<ref>{{cite web |title=Is Islamic Banking, in fact, Islamic? |last1=Zaheer |first1=Khalid |url=http://www.khalidzaheer.com/qa/238 |access-date=21 September 2017}}</ref>
Non-orthodox critics of ''murâbaḥah'', have found the distinction of setting a price "against a commodity" as opposed to "against money" — with the first being allow and the second forbidden because "money has no intrinsic utility" — abstract or suspicious.<ref name=MTUHJI1999:224-5>Usmani, ''Historic Judgment on Interest'', 1999: para 224-5</ref> According to El-Gamal it has been called "merely inefficient lending".<ref name="MeGIFLEP2006:63" />{{#tag:ref| Dr. Yusuf Al-Qaradawi, who described himself as one of the early supporters of Islamic banking, recently criticized many developments in the industry quite harshly. He was particularly critical of tawarruq, which is a natural extension of traditional murabaha financing; cf.<ref>[https://web.archive.org/web/20020724132556/http://www.qaradawi.net/site/topics/article.asp Qaradawi] </ref>|group=Note}} However criticism of the transaction has been primarily levied against its application. Critics complain that in most real world ''murâbaḥah'' transactions the commodities never change hands (the commodity never appears on the bank's balance sheet)<ref name="Irfan-2015-139" /> and sometimes there are no commodities at all, merely cash-flows between banks, brokers and borrowers. Often the commodity is completely irrelevant to the borrower's business and not even enough of the relevant commodities are in existence in the world to account for all the transactions taking place.<ref name=mmhi-2008>{{cite web|url=http://www.arabianbusiness.com/misused-murabaha-hurts-industry-122008.html|title=Misused murabaha hurts industry|publisher=Arabian Business|date=1 February 2008}}</ref> Frank Vogel and Samuel Hayes also note multi-billion-dollar ''murabaha'' transactions in London "popular for many years", where "many doubt the banks truly assume possession, even constructively, of inventory". {{#tag:ref|"A number of scholars have recently cast doubts upon the acceptability of one of the most widely used forms of Islamic finance: the type of Murabaha trade financing practiced in London. These investors and well-known multinationals seeking lowest-cost working capital loans. Although these multi-billion-dollar contracts have been popular for many years, many doubt the banks truly assume possession, even constructively, of inventory, a key condition of a religiously acceptable murabaha. Without possession, these arrangements are condemned as nothing more than short-term conventional loans with a predetermined interest rate incorporated in the price at which the borrower repurchases the inventory. These 'synthetic' murabaha transactions are unacceptable to the devout Muslim, and accordingly there is now a movement away from murabaha investments of all types. Al-Rajhi Bank, al-Baraka, and the Government of Sudan are among the institutions that have vowed to phase out murabaha deals. This development creates difficulty: as Islamic banking now operates, murabaha trade financing is an indispensable tool."<ref name="Vogel and Hayes, pp.8-9">Frank VOGEL and Samuel Hayes, III. Islamic Law and Finance: Religion, Risk and Return [The Hague: Kluwer Law International, 1998], pp.8-9</ref><ref name=MOFRIE-2005:19>Farooq, ''Riba-Interest Equation and Islam'', 2005: p.19</ref> |group=Note}}
Islamic banker Irfan bemoans the fact that "not only is the ''murabaha'' money market insufficiently well developed and illiquid, but the very sharia compliance of it has come to be questioned", often by Islamic scholars not known for their strictness.<ref name="Irfan-2015-226">{{cite book|last1=Irfan|first1=Harris|title=Heaven's Bankers: Inside the Hidden World of Islamic Finance |date=2015|publisher=Overlook Press|page=226}}</ref>
Nejatullah Siddiqi warned the Islamic banking community that the alleged difference between modes of finance based on ''murabahah'', ''bay' salam'' and conventional loans was even less than it appeared: <blockquote>Some of these modes of finance are said to contain some elements of risk, but all these risks are insurable and are actually insured against. The uncertainty or risk to which the business being so financed is exposed is fully passed over to the other party. A financial system built solely around these modes of financing can hardly claim superiority over an interest-based system on grounds of equity, efficiency, stability and growth.<ref>Mohammad Nejatullah SIDDIQI. Issues in Islamic Banking [Leicester: The Islamic Foundation, UK, 1983, p.52</ref></blockquote> Circa 1999 the Pakistan Federal Shariat Court ruled that the "mark-up system ... in vogue" among banks in Pakistan was against the Islamic injunctions.<ref name="MTUHJI1999:219" /> Usmani noted (much like the complaints above) that the Pakistani banks failed to follow proper ''murabaha'' requirements—not actually buying a commodity or buying one "already owned by the customer".<ref name=MTUHJI1999:191>Usmani, ''Historic Judgment on Interest'', 1999: para 191</ref>
;Late payment While in conventional finance late payments/delinquent loans are discouraged by accumulating interest, in Islamic finance control and management of late accounts has become a "vexing problems", according to Muhammad Akran Khan.<ref name=WIWWIE2013:207-8>Khan, ''What Is Wrong with Islamic Economics?'', 2013: p.207-8</ref> Others agree it is a problem.<ref name="Parker-2010" /><ref name="IIFTU1998:91" />{{#tag:ref|The Islamic Bankers Resource Centre also states that "for the longest time, Islamic Banks have been abused by delinquent customers due to the low penalties for late payments".<ref name="IBRC">{{cite web|title=Late Payment Charges for Islamic Financial Institutions|url=https://islamicbankers.me/focus/late-payment-charges-tawidh-gharamah/|website=Islamic Bankers : Resource Centre|date=11 June 2014|access-date=2 December 2016}}</ref>|group=Note}} According to Ibrahim Warde, <blockquote>Islamic banks face a serious problem with late payments, not to speak of outright defaults, since some people take advantage of every dilatory legal and religious device ... In most Islamic countries, various forms of penalties and late fees have been established, only to be outlawed or considered unenforceable. Late fees in particular have been assimilated to riba. As a result, 'debtors know that they can pay Islamic banks last since doing so involves no cost'<ref name=WIWWIE2013:207-8 /><ref name=IFGE2010:163>Warde, ''Islamic finance in the global economy'', 2000: p.163</ref></blockquote> Warde also complains that <blockquote>"Many businessmen who had borrowed large amounts of money over long periods of time seized the opportunity of Islamicization to do away with accumulated interest of their debt, by repaying only the principal -- usually a puny sum when years of double-digit inflation were taken into consideration.<ref name=WIWWIE2013:207-8 /><ref name=IFGE2010:163 /></blockquote>
Some suggestions to solve the problem include having the government or the central bank penalizing defaultors "by depriving them" of the use of "any financial institution" until they paid up (Taqi Usmani in ''Introduction to Islamic Finance'') -- although this would require a completely Islamized society.<ref name="IIFTU1998:91" /> Collecting late fees but donating them to charity,<ref name="Edward Elgar" /><ref name="kettell-38" /><ref name="al-yusr" /> Collecting late fees only when the buyer "has deliberately refused to make a payment".{{#tag:ref|Mumtaz Hussain, Asghar Shahmoradi, Rima Turk, writing for the IMF.<ref name=IMF-2015-8 />|group=Note}}
;Extra costs
Because ''murabaha'' financing is “asset-based” financing (and must be to avoid riba according to orthodox Islamic thinking), it requires financiers to purchase and sell properties. But regulatory frameworks in most countries forbid financial intermediaries such as banks "from owning or trading real properties" (according to scholar Mahmud El-Gamal).<ref name="MeGIFLEP2006:14" /> Furthermore when the financier holds title to the property being sold it can be lost "if the financier is sued, loses, and declares bankruptcy", and this can happen when a customer has paid off most /almost all of the product/property’s price. To avoid these dangers SPVs (Special Purpose Vehicles) are created to hold title to the property and also "serve as parties to various agreements regarding obligations for repairs and insurance" as required by Islamic jurists. However, the SPVs entail extra costs usually not borne in conventional finance.<ref name="MeGIFLEP2006:14">El-Gamal, ''Islamic Finance'', 2006: p.14, 64-5</ref>
;Example of Murâbaḥah An example of a ''murabaha'' contract is: Adam approaches a ''Murabaha'' Bank in order to finance the purchase of a $10,000 automobile from “Cash-Only-Automobiles”. The bank agrees to purchase the automobile from “Cash-Only-Automobiles” for $10,000 and then sell it to Adam for $12,000 which is to be paid by Adam in equal installments over the next two years.
While the cost to Adam is approximately that of a 10% per year loan, the ''Murabaha'' Bank using this transaction maintain it is different because the amount that Adam owes is fixed and does not increase if he is delinquent on payments. Therefore, the finance is a sale for profit and not ''riba''.
Another argument that ''murahaba'' is shariah compliant is that it is made up of two transactions, both halal (permissible):
Buying a car for $10,000 and selling it for $12,000 is allowed by Islam. <br />Making a purchase on a deferred payment basis is also allowed by Islam.
However, not mentioned here is the fact that the same car that is being sold for $12,000 on a deferred payment basis is being sold for $10,000 on a cash basis. So basically Adam has two options:
#“Cash-Only-Automobiles” will sell him the car for $10,000 but are not willing to wait to receive the full price. #The Murabaha Bank will sell him the car for $12,000 and is willing to wait two years to receive the full price. Adam’s choice to purchase from the Murabaha Bank reflects his desire to not pay the full price of the car today. In other words, he prefers to pay part of the price today and be indebted with the rest.
The Murabaha Bank agrees to be owed by Adam the price of his car in return for the amount that it is owed being $2,000 more than the price of the car today.
Did the bank charge Adam a predetermined return for the use of its money [interest]? Yes. The bank charged $2,000 in return for Adam’s use of its $10,000 to buy a car.
The fact that no penalties are assessed if Adam is delinquent on his payments simply means that the amount of interest in the ''murabaha'' contract is fixed at $2,000.<ref name="kayali-MHoH" /> This amounts to a ''Ḥiyal'' or legal "trick" to defeat the intent of shariah.<ref name="Irfan-2015-137" />
== See also == *Islamic banking and finance *Profit and loss sharing *Islamic finance products, services and contracts *Sharia and securities trading *''Muamalat'' *FINCA Afghanistan, a Murâbaḥah-compliant microfinance institution (MFI)
==References==
===Notes=== {{reflist|group=Note}}
===Citations=== {{Reflist|30em}}
===Books, documents=== *{{cite journal|last1=Farooq|first1=Mohammad Omar|title=The Riba-Interest Equation and Islam: Re-examination of the Traditional Arguments (November 2005, September 2009) |journal=Global Journal of Finance and Economics |volume=6 |issue=2 |pages=99–111|url=http://ebooks.rahnuma.org/religion/Islamic_Fiqh/Riba-Interest%20Equation%20and%20Islam.pdf |access-date=16 September 2016|ref=MOFRIEI2005}} *{{cite book|last1=Irfan|first1=Harris|title=Heaven's Bankers: Inside the Hidden World of Islamic Finance |date=2015|publisher=Overlook Press| ref=HIHB2015}} *{{Cite book|url=https://books.google.com/books?id=T7ImTjBd1gQC&q=islamic+finance+for+dummies|title=Islamic Finance For Dummies|last=Jamaldeen |first=Faleel|date=2012|publisher=John Wiley & Sons |isbn=9781118233900 |language=en |ref=FJIFD2012 |access-date=15 March 2017}} *{{Cite book |url=http://iugc.yolasite.com/resources/Reference%20Book%2004%20-%20Islamic%20finance,%20law%20economics%20and%20practice,%20M.%20El%20Gamal.pdf |title=Islamic Finance : Law, Economics, and Practice |last=el-Gamal |first=Mahmoud A. |publisher=Cambridge |year=2006 |isbn=9780521864145 |location=New York, NY |ref=MeGIFLEP2006 |access-date=2017-03-04 |archive-url=https://web.archive.org/web/20180403160351/http://iugc.yolasite.com/resources/Reference%20Book%2004%20-%20Islamic%20finance,%20law%20economics%20and%20practice,%20M.%20El%20Gamal.pdf |archive-date=2018-04-03 |url-status=dead }} *{{Cite book|last=Khan|first=Feisal|url=https://books.google.com/books?id=dqlACwAAQBAJ&q=islamic+modernism+and+financial+interest&pg=PA80 |title=Islamic Banking in Pakistan: Shariah-Compliant Finance and the Quest to Make Pakistan More Islamic |date=2015-12-22 |publisher=Routledge |isbn=9781317366539 |language=en |access-date=9 February 2017 |ref=FKIBP2015}} *{{cite book|last1=Khan|first1=Muhammad Akram|title=What Is Wrong with Islamic Economics?: Analysing the Present State and Future Agenda |date=2013|publisher=Edward Elgar Publishing|url=https://books.google.com/books?id=Fr36Gd1X_rcC&q=khan+sum+up+the+modernist+interpretation&pg=PA178|access-date=26 March 2015|ref=WIWWIE2013|isbn=9781782544159}} *{{cite book |last1=Turk |first1=Rima A. |title=Main Types and Risks of Islamic Banking Products |date=27–30 April 2014 |publisher=Regional Workshop on Islamic Banking. International Monetary Fund |location=Kuwait |url=http://www.imfmetac.org/Upload/Link3_743_105.pdf |access-date=17 August 2017 |ref=RATMTRIBP2014 |url-status=dead |archive-url=https://web.archive.org/web/20170517075857/http://www.imfmetac.org/Upload/Link3_743_105.pdf |archive-date=17 May 2017}} *{{cite book |last1=Usmani |first1=Taqi |url=http://apsk.kz/en/images/economics/An%20Introduction%20to%20Islamic%20Finance.pdf |archive-url=https://web.archive.org/web/20150807040308/http://apsk.kz/en/images/economics/An%20Introduction%20to%20Islamic%20Finance.pdf |url-status=dead |archive-date=2015-08-07 |title=An Introduction to Islamic Finance |date=1998 |location=Kazakhstan |ref=IIFTU1998}} *{{cite book |last1=Usmani |first1=Muhammad Taqi |title=The Historic Judgment on Interest Delivered in the Supreme Court of Pakistan |publisher=albalagh.net |location=Karachi, Pakistan|url=http://www.albalagh.net/Islamic_economics/riba_judgement.pdf |date=December 1999 |ref=MTUHJI1999}}
==External links== *[http://www.wdibf.com/ World Database for Islamic Banking and Finance] {{Subject bar|auto=y|d=y|Banks}} {{Islamic banking and finance}} {{Islam topics|state=collapsed}}
Category:Islamic banking Category:Islamic banking and finance terminology Category:Islamic financial contracts