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Mourabaha
Operations
Definition:
Murabaha sale
is one kind of absolute sale (asset for price),
which is divided
into four kinds in respect to price:
*
Bargain Sale:
It
is selling the commodity for agreed upon price
irrespective of its
purchase price.
*
Tawlia Sale (Respective sale):
It is selling the
commodity for its purchase price without addition
or discount.
*
Discount Sale:
It is selling the
commodity for its purchase price with a certain
discount.
Murabaha
Sale:
It is
selling the commodity for the purchase price plus
a certain profit
margin agreed upon. This margin can be a
percentage of the
purchase price or a lump sum.
These
last three are called "Amana (honesty)
Sales".
Murabaha
Sale is divided into two types:
Ordinary
Murabaha Sale:
There are two parties to it, the seller and
the buyer. The
seller is an ordinary trader who buys a commodity
without depending on
a prior promise of purchase, then he displays
it for Murabaha sale for a price and a profit to
be agreed
upon.
Murabaha
Sale connected with a promise:
There are three parties to it. The seller, the
buyer and the bank as
an intermediary trader between the buyer and the
seller. The
bank here does not purchase unless the buyer
specifies its
desire and a prior outstanding promise to
purchase.
The
mode of Murabaha sale connected to a promise is
used by the
Islamic banks which undertake the purchase of
commodities
according to the specifications requested by
the customer and
then resell them on Murabaha to the one who
promised to buy for its cost price plus a margin
of profit agreed
upon previously by the two parties.
There
are different forms to the application of Murabaha
sale connected
to a promise of purchase. Some of these forms are
determined by
whether the promise is binding or not. Other
forms are determined
by how the bank receives the commodity in
the case of the first sale. Should the bank
receive the commodity
directly or through one of its agents or should it
authorize the buyer
to receive the commodity.
The
Practical Steps of the Murabaha Sale
1.
The purchaser determines its needs The
purchaser: determines the specifications of the
commodity he
wants and requests the seller to determine the
price.
The
seller: sends a quotation valid for a certain
period.
2.
Signing a promise to purchase agreement The
purchaser: promises to buy the commodity from the
bank on Murabaha
sale for the cost of the commodity plus the agreed
upon profit.
The
bank: studies the request and determines the
conditions and
securities for approval.
3.
The first sale contract
The bank: notifies the purchaser of its approval
of purchasing the
commodity. The bank may pay the price immediately
or as per the
agreement.
The
seller: expresses its approval to the sale and
sends the invoice.
4.
Delivery and receipt of the commodity
The bank: authorizes the beneficiary to receive
the commodity.
The
seller: sends the commodity to the place of
delivery agreed upon.
The
Purchaser: undertakes the receipt of the commodity
in its capacity
as legal representative and notifies the bank of
the execution
of the proxy.
The
Evidence of Legality
1.
The legality of Murabaha sale is (obtained)
obvious from:
It is no crime in you
If you seek of the bounty
of your Lord
Al-Baqara
198
That
is because Murabaha represents looking for more.
It is also subsumed
under the general rule that legalizes sale Allah
sayeth "Allah
hath permitted trade".
2.
The Prophet (PBUH) permitted the sale of the
commodity for more
than its purchase price. He said: "if the two
commodities are different,
buy and sell as you wish.
3.
The consensus of the Ummah on the permissibility
of the Murabaha
sale. The Kassani has pointed out that the people
inherited these
kinds of sales (Murabaha and other sales) throughout
the generations and ages without any protests of
non acceptance.
4.
The Fatwa of the second conference of the Islamic
bank: "The
promise in the Murabaha sale to he who orders the
purchase "
is legally permissible after owning and possessing
the commodity, only
then it is permissible to sell it to the purchaser
who requested it for the
price specified and mentioned in the previous
mutual promise agreement
as long as the liability of damage before delivery
and the consequences
of a return for unseen defect is on the bank.
As
to whether the promise is binding to the buyer,
the bank or both, it better
secures the interests of all parties, the bank and
the customer, to have
the promise as binding. It is legally acceptable
and it is up to each Islamic
bank to take either opinion according to what its
committee of legal observers
decide."
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