AboutMurabaha
Murabaha comes from a root Arabic word, ribh, which means ‘increase’.
Murabaha is the mark-up disclosed to the purchaser over the purchase price of a certain specified asset, excluding monetary assets such as cash, gold, silver and receivables. Murabaha sale can be contracted on cash or credit basis.
It is selling of goods as per the purchase price with a defined and agreed profit mark-up. This mark-up may be a percentage of the selling price or a lump sum figure. This transaction may be concluded either without a prior promise to buy, in which case it is called an ordinary Murabaha, or with a promise to buy submitted by a person interested in acquiring goods through the institution, in which case it is called a Financing Murabaha.