Discussion of Murabahah.

The Shaykh : The transaction we were about to begin discussing, which is called murabahah, is exactly like the marriage of tahleel. Why? Because it is a sale and purchase, and all the conditions for this sale are present. But what is the intention behind this type of sale? It is making riba permissible. Here, we may enter into a matter where we are somewhat distant from one another, but we will draw closer, if Allah wills. Where is the picture of making riba permissible? Now, if we leave the figure of the bank and replace it with a wealthy individual: a man comes to him and says, "I want to buy a ton of iron, and its price is, for example, one thousand. I hope you will lend me one thousand for, say, one month, and I will give you, in return for the one thousand, one hundred." He says to him, "No, this is riba. This extra hundred is forbidden riba; it is not permissible." May Allah reward you. So, what is the way? Go, you, and take the ton of iron, and all you have to do is pay me one thousand and one hundred in place of the one thousand. What is the difference between the two pictures? It is like the difference between a lawful marriage and the marriage of tahleel. The conditions are present, but here the wealthy man pretends to be a person of business and righteousness, and he openly declares, "I do not accept this hundred." So, I want to give you one thousand in your hand; I do not accept taking one thousand and one hundred, because this hundred is riba. What is the difference between this picture and the one where he entered as an intermediary between him and the merchant and said, "Go, you, take the ton of iron and pay one thousand and one hundred in place of the one thousand"? There is no difference except that the form has changed. And what confirms what you mentioned just now is that if it is for one month, the profit rate is such-and-such; if for two months, it is more; if for a year, it is more, and so on. The later the repayment, the more the profit doubles. So, what is the difference between the ribawi in our first example, where a righteous man refused to eat riba, and the one who eats riba openly? It is the same transaction. If you borrow one thousand from him for a month, he takes, for example, a profit of two or three percent, and so on. But if it is for a year? The profit increases. We are asking the Islamic bank now: why do you double the profit as the repayment is delayed? Is this transaction not the same as the explicit ribawi transaction? But all that is the case here is that the form of a sale has been introduced. If one of us went to the bank and said, "Give me one thousand dinars as a benevolent loan so I can buy a ton of iron," they would not give it to him.

The questioner : They give it, but it is limited.

The Shaykh : No, no, we do not have a limit in that. We want the transactions that are conducted under what they call murabahah. If he said to him, "Instead of you entering as an intermediary between me and the merchant, give me this one thousand and take delivery of the iron or any goods," I say, "No, I want to make a profit." At that point, it is said to him, "If you want to make a profit, engage in trade. Do not engage in changing the form of riba, as the muhallil did when Allah the Exalted and Majestic prohibited it from marriage. I said I wanted to mention two examples, one of which is well-known, and my suspicion is correct.