Lesson 7 Flashcards
What is Muraabahah
Muraabahah is a particular kind of sale whereby the seller expressly tells the purchaser how much cost he has incurred and how much he is going to charge in addition to the cost i.e. profit
What are Basic rules of a sale
Item of sale must be in existence
It has to be owned by the seller
Must be in physical or constructive possession
The sale must be instant and absolute
The subject of sale must be specifically known and identified to the buyer
The delivery of the sold commodity must not depend on a contingency or change
What is the Procedure of Muraabahah as a mode of finance
Client and institution sign a n overall agreement “a promises to sell “ “promises to buy ?
Institution appoints client as their agent
The client (agent) purchases the commodity on behalf of the institution
Client informs the institution that he has purchased the commodity and then makes an offer to purchase
The institution accepts the offer and the sale is concluded whereby the ownership as well as the risk is transferred to the client
Is murabaha a loan given in interest
No
