Murabaha Assignment Example | Topics and Well Written Essays - 1000 words

Murabaha - Assignment ExampleMurabaha is a contract of trust, thus, the goods must be of the select agreed between the depose and customer. The bank bears the risks that the goods whitethorn develop a defect or whitethorn be destroyed, since Murabaha is executed at the second sale. The customer spate reject the goods if they contain defects or for the reasons of inadequate performance (Hayes and Vogel 141).It is prohibited to sell Waqf (endowments) since they are not owned by a specific somebody and for any sell to be valid the owner must be unambiguously identifiable. Istibdal, which is the sale of Waqf land, can be entered in Murabaha agreement, since the proceeds are use for the purchase of another land to be used for the Waqf purposes. However, according to Hanbalis, the benefits of Waqf cannot be obtained where the land is ruined, barren or is a mosque that is not used for prayers (Iqbal and Greuning 40).A bank conducting a purchase under a Murabaha contract may open a docum entary commendation in a foreign bank and receive commissions. Fiqh Academies prefer the prevention of banks taking the commission since it may demand the value of the guarantee in case of buyer defaulting on the agreement (Schoon 32). The bank should apprise the buyer of such commission and pass it to the buyer by a way of reduction in the Murabaha contract price (Haron and Azmi 400).It is not allowed for the bank to finance a concluded deal between the lymph gland and owner of goods under a Murabaha contract. Murabaha entails the selling of an identifiable good that the seller owns, disclosing the costs and adding a in return agreed mark up to the cost of the goods (Saeed 58). Murahaba agreements are not valid for the goods which are not bought or in the possession of the bank (Kettel 48). If the concluded deal is for a specific transaction, the bank should request for demonstration of the termination of the concluded deal before it can enter in to a Murabaha agreement with t he client. jibe