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.
References in periodicals archive ?
Manama: Al Baraka Banking Group yesterday announced its Turkish subsidiary, Al Baraka Turk Participation Bank, had concluded a syndicated Sharia-compliant Murabaha financing, raising a total of $278 million and 154.
AlBaraka Turk) has successfully closed a $278,000,000 and EUR 154,500,000 Dual Tranche Syndicated Murabaha Financing Facility.
Dubai: Nasdaq Dubai said on Monday Ajman Bank has begun transacting on the its Murabaha Platform, which facilitates the provision of streamlined Sharia-compliant financing services.
25 billion ($3 billion) consisting of Murabaha facilities, of which SR7.
25 billion (USD 3 billion) consisting of Murabaha facilities, of which SR7.
has announced the significant closing of a $350,000,000 equivalent Syndicated Dual Currency Dual Tranche Murabaha Financing Facility.
The Nasdaq Dubai Murabaha Platform, which comprises assets that Islamic financial institutions can use to back transactions for their customers, wants to increase the range of securities it offers, according to chief executive officer Hamed Ahmed Ali.
Dubai: Bahrain's stock exchange plans to launch a range of Islamic investment products, including a novel equity-based murabaha financing tool and Islamic real estate investment trusts (REITs), its chief executive told Reuters.
Reuters -- Dubai will compete with London for a share of Islamic banks' liquidity management business by offering a new platform for murabaha trading.
DMCC welcomes BGC as its first brokerage partner on the DMCC Tradeflow platform, bringing innovation and efficiency to the trading of Commodity Murabaha and to further promote Dubai as a hub for Islamic finance
The money was reportedly received as per the murabaha principle, which is an accepted practice in Muslim countries where money cannot be lent for interest.
First Energy Bank (FEB), a Bahrain-based Islamic investment bank, has signed a 25-million-euro ($34 million) Murabaha facility with the Netherlands-based Kore Coal Finance, a subsidiary of Sapinda Holding.