Ø Islamic Shariah is the set of rules & regulations which are to be followed by Islamic Banks.
Ø Scholars study these laws and guide the bank on how to apply them on day to day transactions.
BASIC RULES OF
· Since Murabaha is a sale transaction, rules of Shariah regarding sale need to be understood.
·
“Exchange of a thing of value, by another thing of value, with mutual consent”
LEGITIMACY OF
· “But Allah has permitted trade” [2:275],
· “But take witnesses whenever you make a commercial contract” [2:282],
· “But let there be among you traffic and trade by mutual good will” [4:29],
· “It is no crime for you to seek the bounty of your Lord” [2:198].
Rules of Sale
Rule 1: The subject of sale must exist at the time of sale
Rule 2: The subject of sale must be in the ownership of seller at the time of sale. Hence, what is not owned by the seller cannot be sold.
Rule 3:
The subject of sale must be in the physical or constructive ownership of seller at the time of sale.
“Constructive Possession” means where the buyer has not taken physical delivery of goods, but the goods are under his control. And all rights and liabilities of the goods have passed to him,i.e. the goods are at his risk.
Rule 4:
The sale must be instant and absolute. Thus a sale attributed to a future date or a sale contingent on a future event is void.
Rule 5
The subject of sale should be an object of value. A thing having no value according to the usage of trade cannot be sold.
Rule 6
The subject of sale should not be a thing used for a Haram purpose, e.g. pork, wine etc. The subject should be Maal-e-mutaqawwam
Rule 7
The subject of sale should be specifically known and identified to the buyer. The subject of sale must be identified by pointing out or by detailed specification which can distinguish it from other things not sold.
Rule 8
The delivery of the sold commodity to the buyer should be certain and should not depend on a contingency or chance.
Rule 9
The certainty of price is a necessary condition for the validity of sale.
Rule 10
