A contract between a buyer and a seller under which
the later first purchases the goods at the request of the former i.e.,
customer and then sells it to the same customer after adding profit.
Parties in Murabahah
Buyer
Bank’s Customer
Seller
Bank
Agent
Appointment of customer as agent of the bank (Foreign Transactions)
/ common broker (for Local Transactions).
Murabahah Sale Price
Cost + Expenses incurred + Agreed Profit
Mode of Repayment
Immediately in cash
On mutually agreed future date
Spot Murabahah (Import Related Transactions)
Deferred Sale Murabahah
Types of Murabahah
DOMESTIC
(Local Purchases)
INTERNATIONAL
(emerging from SLC)
Murabahah General, for purchase of cotton or any other commodity on deferred payment basis
Spot Murabahah (Cash Retirement)
Deferred Payment Murabahah
a) Pledge of Imported Goods
b) Trust Receipt
c) Ship Breaking
Common Features
Request of customer for purchases / import of specific goods.
Appointment of customer as agent of the bank (Foreign Transactions) / common broker (for Local Transactions).
The bank after taking possession of goods and establishing its ownership, shall deliver the same or documents of title thereof to the customer on the basis of offer and acceptance.
Price / profit once fixed cannot be changed either on premature or overdue repayment.
Repayment period once fixed cannot be extended. Rollover of liabilities not permissible by Sharia. Similarly, goods cannot be repurchased against which Murabahah already allowed / adjusted.
All costs / charges to be incurred pre / post Murabahah execution, to be determined, calculated earlier and included in Murabahah Selling Price.
Custom duties to be either paid in full by bank or customer. If paid by the bank, it shall be part of Murabahah Selling Price.
Appropriate collateral / securities can be obtained as per mutual consent.
Insurance to continue till Takaful (Islamic Insurance) is available in Pakistan.
