Murābaḥah Structuring Framework
A trust-based sale (bayʿ al-amānah) in which the institution discloses the original cost of an asset and adds a clearly stated mark-up, with payment deferred under agreed terms.
Shariah Basis
"Allah has permitted trade and forbidden ribā."
"Murābaḥah to the purchase orderer (full lifecycle conditions)."
"Permissibility of Murābaḥah lil-āmir bi al-shirāʾ."
AAOIFI Shariah Standard No. 8 — Murābaḥah to the Purchase Orderer
Parties
Acquires and owns the asset before reselling at cost-plus.
Purchase orderer who commits to buy after the institution acquires the asset.
Third-party vendor delivering the asset to the institution.
Essential vs Prohibited
Essential Conditions
- Asset must physically exist and be Shariah-permissible (ḥalāl)
- Institution acquires legal ownership prior to onward sale
- Institution assumes constructive or actual possession (qabḍ)
- Original cost is disclosed truthfully to the client
- Profit margin is disclosed and mutually agreed
- Sale price is fixed at contract execution — no fluctuation
- Deferred-payment terms (tenor, instalments, late-payment policy) are documented
Prohibited Elements
- Bayʿ al-dayn — sale of debt to third parties at a discount
- Gharar — excessive uncertainty in asset, price or delivery
- Ribā — any interest accrual on the deferred price
- Asset ownership bypass — same-day back-to-back without genuine ownership transfer
- Penalty income retention — late-payment charges must be channelled to charity
Transaction Flow
- 1
Client Purchase Request
Client submits MPO (Murābaḥah Purchase Order) with asset specifications, supplier and indicative cost.
- 2
Institution Purchases Asset
Institution executes a binding sale contract directly with the supplier.
- 3
Institution Takes Ownership & Possession
Legal title and qabḍ (constructive possession) are recorded before any onward sale.
- 4
Murābaḥah Sale Executed
Institution sells the asset to the client at cost + disclosed profit, on deferred terms.
- 5
Deferred Payment Schedule
Client services the fixed sale price per the agreed instalment plan.
- 6
Completion & Release
Final payment, release of any collateral, post-completion documentation archived.
Required Documentation
- Master Murābaḥah Facility Agreement
- Murābaḥah Purchase Order (MPO) — non-binding promise (waʿd)
- Asset Purchase Agreement (Institution ↔ Supplier)
- Murābaḥah Sale Contract (Institution ↔ Client)
- Cost & Profit Disclosure Statement
- Delivery / Possession Acknowledgement
- Shariah Adviser Approval Memorandum
Risk Controls
- Asset verification and supplier due diligence
- Ownership-sequence audit trail (no same-day ownership bypass)
- Independent cost-disclosure validation
- Late-payment monitoring with charity-only penalty income
- Annual Shariah audit and corrective-action tracking
OSAS-MUR™ — Advisory Dossier
Open the corresponding OSAS™ advisory standard to access the approval memorandum template, transaction layout sheet and Shariah opinion structure for this contract.
Open OSAS-MUR™Part of the Onike Framework Ecosystem
OFIS™ · Onike Framework for Islamic Finance
Reviewed and Approved by Abdul-Azeez Onike Morufu — Registered Shariah Adviser, Securities Commission Malaysia
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