Murabaha to the purchase orderer
Murabaha in which the customer first asks the bank to buy an asset and promises to buy it from the bank once acquired.
Murabaha to the purchase orderer is the banking form of murabaha. The customer identifies an asset and promises to buy it; the bank then acquires the asset and sells it to the customer at cost plus an agreed profit. The IFSB's definition notes that the murabaha contract can be preceded by such a promise to purchase. The promise is not itself the sale, so the bank still has to own the asset before the sale is concluded.
Sources
This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.
Related terms
MurabahaA sale at cost plus an agreed, disclosed profit; the seller must own the asset first. Payment is often deferred in instalments.Hamish jiddiyyah (security deposit)A deposit paid by a customer to secure a promise to buy; it covers only actual loss if the promise is broken.Wa'd (promise)A unilateral promise to do something in the future; it can be made binding and is used in hedging, sukuk and lease-to-own deals.Urbun (earnest money)An earnest payment made at signing: part of the price if the sale completes, kept by the seller if the buyer withdraws.