Bai-Murabaha

Bai-Murabaha:
Bai means 'Sale and purchase'. Ribhun means 'an agreed upon profit'.  So, Bai-Murahaba means 'Sale on agreed upon profit.'


Bai-Murabaha may be defined as a contract between a Buyer and a Seller under which the Seller sells certain specific goods permissible under Islamic Shariah and the Law of the land to the Buyer at a cost plus agreed profit payable in cash or on any fixed future date in lump sum or by installment. The profit marked-up may be fixed in lump sum or in percentage of the cost price of the goods.

Types of Bai-Murabaha:

Considering the ways and parties involved, Bai-Murabaha may be two types



i) Ordinary Bai-Murabaha:When a Bai-Murabaha transaction is make between two parties, the seller and the buyer, without any promise to buy the goods by the buyer, it is called Ordinary Bai-Murabaha.
ii) Bai-Murabaha on Order and Promise: When a Bai-Murabaha transaction is done with the participation of three parties where the first party(the buyer) promise to buy some specific goods/assets by placing order to the second party( the intermediary trader) and the second party upon receipt of order from the first party buyer with specification and prior promise to buy the goods/assets, procures the ordered goods/assets from a third party( the seller) and sells it to the first party buyer at a cost plus agreed profit, it is called Bai-Murabaha on promise or order.

Considering payment of price, Bai-Murabaha may be two types

i) Bai-Murabaha Bin Naqd: When the price of Bai-Murabaha transaction is paid instantly, it is called Bai-Murabaha bin Naqd.
ii) Bai-Murabaha Bil Ajl: When the payment of a Bai-Murabaha transaction is deferred on any fixed future date in lump sum or by installment, it is called Bai-Murabaha bil Ajl.