Does the bank's profit in Murabaha have to be known from the beginning? | Ask Banky

Editor-in-Chief Mohamed Salah

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Editor-in-Chief Mohamed Salah

Does the bank's profit in Murabaha have to be known from the beginning?

Asked by Banky team 2 months ago
Banky team Reviewed editorial answer

In a Murabaha transaction, the selling price you'll commit to must be clearly stated at the time of the sale, because you need to know the amount of debt you'll incur.

Key points

  • In practice, don't just settle for a "profit margin of such and such"; ask for the final selling price, the payment schedule, and any separate fees.

  • If the underlying cost isn't clear, the comparison and decision-making process will be misleading.

The figures, fees and limits in this answer vary by bank and change over time — confirm them with your bank or the official source before acting.

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