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Murabaha Transaction
Subjects > Religion > Islam > Islamic Finance
A murabaha transaction involves a purchase and deferred payment resale. At the customer's direction the Bank acquires and then sells the property to the customer for a fixed price--the purchase price that the Bank pays plus a profit. This total price is then paid by the customer to the Bank in an initial down payment and in fixed installments over an agreed-upon period of time at no interest. Terms are available for 15, 20, or 30 year payment periods. It is the Islamic Financing product most closely resembling a conventional fixed-rate mortgage.
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Murabaha Transaction