Murabahah is a contract whereby, at the request of the customer, the Islamic Bank buys the asset from a third-party supplier and resells it to the customer, either for immediate payment or against a deferred payment basis. In principle, Murabaha`s financing is the sale of goods at an agreed price. Many argue that this is simply another method of calculating interest. However, the difference lies in the structure of the contracts. In a Murabaha contract for sale, the bank buys an asset and then resells the asset with a tax on profits to the customer. This type of transaction is halal or valid, according to Islamic Sharia/Sharia Sharia. (i) against existing laws, regulations or authorizations to which the Customer is subject (ii) lead to a violation or delay by an agreement or other instrument in which the customer participates or to which the customer is subject, or in a contract of sale of Murabaha, a customer asks a bank to buy an item on its behalf. The bank meets the customer`s requirement and establishes a contract specifying the cost and benefit of the item, the refund usually being made in installments. Since a fixed tax is levied in place of Riba (interest), this type of loan is legal in Islamic countries. Islamic banks are prohibited from claiming interest on loans in accordance with the religious principle that money is only a means of exchange and has no intrinsic value; Banks must therefore collect a flat fee for the continuation of day-to-day activity.
The murabahahah, its mechanism, your accounting standards, Sharia standards and their organization will be discussed in more detail in the context of Islamic financial certification, Islamic banking courses, the Islamic Finance Masters and doctoral financial programs offered by the Islamic Finance Institute of AIMS. (a) payment of the purchase price by the establishment to the supplier on the date of value does not result in a violation of an existing law or agreement; (b) security has been established, effectively perfected and supports the approval of this agreement; (c) the institution has received the other documents that it can reasonably require for the payment of the entrance fee; (d) no event or circumstance that, as a result of notification or expiry of the deadline or both, would not constitute a delay event occurs and continues or is likely, and the payment of the cost price should not lead to a delay incident; (e) the provision of an authentic and complete extract of all relevant elements of the minutes of a duly convened board meeting, at which the main documents are approved and the necessary authorizations for the conclusion, execution and delivery of the main documents, duly signed and authenticated by the person duly authorized for this purpose by the Board of Directors; (f) All fees, commissions and charges that the customer must pay at the establishment are received by the establishment. Additional fees should not be collected on Murabaha`s due date, making Murabaha`s bankruptcy a growing concern for Islamic banks. Many banks believe that defaults should be blacklisted and should not allow future loans from an Islamic bank as a way to reduce Murabaha`s bankruptcy. Although not explicitly mentioned in the loan agreement, this scheme is permitted in Sharia law. If a debtor is in a real emergency and cannot repay a loan within a period of time, a pause may be granted, as described in the Quran. However, the government can take action in the event of a voluntary default. Payment defaults under the Murabaha agreements have become a problem for companies operating under Islamic law and there is no clear consensus on how to manage them.