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Home > QFINANCE Dictionary > Definition of murabaha

Definition of



when Islamic bank purchases item for customer in Islamic financing, an arrangement in which a bank purchases an item for a customer provided the customer agrees to purchase it from the bank at a prearranged higher price.

Related definitions of "murabaha"

murabaha - Related Articles
  • Islamic Modes of Finance and the Role of Sukuk

    Best Practice

    Broadly speaking, Islamic modes of finance can be divided into two types: either they provide direct finance as capital funds through partnership (musharaka and mudaraba), or they provide indirect finance through leasing (ijara) and sale contracts (murabaha, bai ajil, salam, and istisna
    By Abdel-Rahman Yousri Ahmad

  • Introduction to Islamic Financial Risk Management Products

    Best Practice

    This structure has provided the framework for shariah-compliant financial risk management products by replacing the synthetic trade with an actual commodity (or any other asset) trade structured along the lines of a murabaha. This is a common Islamic structure under which assets can be sold
    By Qudeer Latif, Susi Crawford

  • Risk Management of Islamic Finance Instruments

    Best Practice

    Shariah-compliant swap transactions are traded bilaterally and combine opposite, maturity-matched murabaha contracts with instantaneous (or periodic) transfer of similar assets and delayed payment of the sales price (inclusive of a premium payment for the use of the asset until the maturity date).4
    By Andreas Jobst

  • Key Islamic Banking Instruments and How They Work


    This checklist provides an overview of Islamic banking instruments, such as murabaha, bai salam, istisna, ijara, and mudaraba.


Definitions of ’murabaha’ and meaning of ’murabaha’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’murabaha’ and other financial terms with our online QFINANCE Financial Dictionary.

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