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Commodity murabaha: does it violate Islamic norms? Note

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  • Hasan, Zubair

Abstract

Recently commodity murabaha has run into disrepute due to court decisions going against the use of this instrument in Islamic banks. This brief note argues that at fault has been the structure of contracts and the excessive use of the instrument. In principle, commodity murabaha is doubtless rooted deep in the Islamic Shari’ah.

Suggested Citation

  • Hasan, Zubair, 2008. "Commodity murabaha: does it violate Islamic norms? Note," MPRA Paper 11736, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:11736
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    File URL: https://mpra.ub.uni-muenchen.de/11736/1/MPRA_paper_11736.pdf
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    Keywords

    Key words: Islamic finance; commodity murabaha; Time value in price; Shari’ah intention and spirit;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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