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Murabaha

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Murabaha
A structure in Islamic finance in which one party buys a good for cash and then sells it to a second party for deferred payments. For example, if Joe wishes to buy a house, he asks a bank to purchase it and then sell it to him for a higher price than the bank paid. While the bank pays cash up front, Joe amortizes his payments over an agreed-upon number of years. From Joe's perspective, this is similar to a conventional mortgage because the payments are likely the same. Because there is no debt with interest, a murabaha is thought to conform to Islamic law. However, murabahas are controversial even within Islamic finance because some scholars believe the profit on the second sale imitates interest too closely.


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Byline: Manama German lender Deutsche Bank can convert a $100 million convertible murabaha into shares in Bahrain-based Gulf Finance House (GFH) at $0.
Byline: Staff Report Gulf Finance House place second US$100 million convertible murabaha facility with Deutsche Bank Dubai Gulf Finance House (GFH) announced it signed an agreement with Deutsche Bank yesterday for the placement of its second $100 million (Dh367 million) convertible murabaha facility (Islamic financing based on real assets).
MANAMA: Gulf Finance House (GFH) has signed an agreement with Deutsche Bank for the placement of its second $100 million convertible murabaha facility.
 
 
 
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