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Murabahah

A Murabaha transaction involves the sale of goods (the commodity to be purchased) at a price that includes a profit margin agreed upon between the two parties. The seller must notify the buyer of the actual cost of the asset and the profit margin at the time of the sale contract. Payment can be made either in one lump sum or in installments.

 

 

Here's how it works:
  •  You choose one of the assets (goods/car) that you wish to purchase.
  •  Then you pledge to purchase the asset from the bank through the Murabaha process.
  •  The bank purchases the asset from the owner for an immediate amount.
  •  The ownership of the goods is transferred to the bank “in fact or by law”.
  •  After the bank owns the goods, it sells them in a separate contract in installments for a profit.
  •  The ownership of the goods is transferred from the bank to the purchasing customer.