Murabaha

(redirected from Murabahah)

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 ?
RAM Ratings has assigned a preliminary rating of AA1(s)/Stable to Samalaju Industrial Port Sdn Bhd's (Samalaju or the Company) proposed Sukuk Murabahah programme of up to MYR 950 million (the Proposed Sukuk).
Given that Murabahah has been successfully established in Malaysia, it is reasonable to provide more alternatives and allow other structures such as Ijarah and Wakalah to gain a firm foothold in the Sukuk domain.
MANAMA: Bahrain-based International Islamic Financial Market (IIFM), a global standard-setting body for Islamic finance yesterday announced the launch of the IIFM Master Collateralised Murabahah Agreement.
Bahrain-based International Islamic Financial Market (IIFM), a global standard-setting body for Islamic finance has launched the IIFM Master Collateralised Murabahah Agreement.
Commodity Murabahah is used for a wide range of financing needs including general working capital.
Manama: August 14 -- (BNA)-- RAM Rating Services Berhad ("RAM Ratings") recently announced that it has reaffirmed Bahrain Mumtalakat Holding Company's ("Mumtalakat") MYR 3 billion Sukuk Murabahah programme with a long-term rating of 2 and a stable outlook, representing a strong investment grade credit rating profile.
Other notable issuances include 10-year tier II capital sukuk by Albaraka Turk, which was the first sukuk Murabahah transaction issued in the international capital markets from Turkey.
It covers Islamic financial products ranging from murabahah finance, murabahah placement diminishing musharakah, mudharabah and ijarah.
Murabahah : Instead of lending out money, the bank purchases the desired commodity (from a third party and resells at a predetermined higher price to the client.
Kuala Lampur, May 30 (Xinhua-ANI): Malaysia's central bank announced on Wednesday the introduction of a new Islamic monetary instrument, Collateralized Murabahah.
Earlier this month, Malaysia's RAM Ratings assigned a preliminary AA1 rating to TAQA's proposed sukuk Murabahah programme of up to 3.
was partially financed by the first significant Murabahah facility raised by Lloyds TSB Bank.