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The Principles and Practices of Shariah in Islamic Finance - page 34 / 49





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59. A Murabahah sale shall not take effect between the same contracting parties on the same asset. The revolving facility using Murabahah contract may involve separate contracts on different assets between the same contracting parties.

Illustration 18: Murabahah Revolving Facility A master Murabahah agreement to provide a working capital

  • nancing facility at a mark-up of 10% per annum for a period of

2 years was agreed between IFI and its customer in January 2007. The following transactions were effected in the rst year as follows:

  • a.

    Murabahah financing of RM250,000 worth of office equipment at RM25,000 mark-up was transacted in February 2007 to be paid 12 months later.

  • b.

    Murabahah financing of RM150,000 worth of office supplies at RM15,000 mark-up was transacted in April 2007 to be paid 12 months later.

  • c.

    Payment of RM262,500 was made to settle the Murabahah financing of RM250,000 with 50% rebate on mark-up. The payment was received six months earlier in August 2007.

  • d.

    Murabahah nancing of RM350,000 worth of xtures at RM17,500 mark-up was transacted in September 2007 to be paid in 6 months.

In April 2008, full payment was received for financing in April 2007 (transaction b) but there was a request for the transaction in September 2007 (transaction d) to be rescheduled. Thus the fixtures were bought and sold again at the same mark-up to the customer. This transaction does not comply with Murabahah requirements. The purchase and resale of the fixtures to the customer to reschedule the financing is prohibited as it involves the same asset, even though the facility is available in the second year.

No revolving Murabahah contract on the same asset


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