ISLAMIC BANKING

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islamicbanking-business-inner11.jpgMurabaha

Murabaha is a purchase and sale with an agreed-upon profit margin.

Mudaraba

In Mudaraba, the customer provides funds to the bank, which then invests the funds into various investment schemes and financing. The profit sharing is agreed in advance.

Musharaka

Musharaka means “to share.” In a banking context, it indicates that all profits or losses are shared equally.

Ijarah

Ijara is a concept closest to the conventional idea of leasing. This involves payments processing for asset acquisition, rental calculation and payments, arrears processing, and sale of the asset at the end of the contract period
(in the case of Ijarawaiqtina).

iSTISNA

In an Istisna sale, the buyer asks the manufacturer to create a specifc project or commodity with material from the manufacturer. The price is fxed after all

parties give their consent and agree on all the necessary specifcations of the project or commodity.