---
title: "What is Urbun (earnest money)? | IslamicOpenFinance™"
description: "An earnest payment made at signing: part of the price if the sale completes, kept by the seller if the buyer withdraws."
url: https://islamicopenfinance.com/glossary/urbun/
lang: en-GB
source: "IslamicOpenFinance"
---

[Glossary](https://islamicopenfinance.com/glossary/) / [Sale-based contracts](https://islamicopenfinance.com/glossary/#sales)

Sale-based contracts

# 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.

Urbun is an amount paid when a sale contract is signed. The IFSB defines it as an amount that counts as part of the price if the contract is executed and as compensation if it is terminated. It effectively gives the buyer the option to withdraw at the cost of the deposit. Its acceptance draws mainly on the Hanbali school, while other classical schools disagreed, so its treatment can vary between Shariah boards.

## Sources

- [IFSB-23 Revised Capital Adequacy Standard (Banking Segment), 2021: Definitions, Urbun](https://www.ifsb.org/wp-content/uploads/2023/10/IFSB-23_En.pdf)

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

[**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.](https://islamicopenfinance.com/glossary/hamish-jiddiyyah/) [**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.](https://islamicopenfinance.com/glossary/murabaha-purchase-orderer/) [**Tahawwut (hedging)** Hedging; in Islamic finance, risk management transactions built from permissible contracts rather than conventional derivatives.](https://islamicopenfinance.com/glossary/tahawwut/)

**Sale-based contracts**

1. [Murabaha](https://islamicopenfinance.com/glossary/murabaha/)
2. [Musawamah](https://islamicopenfinance.com/glossary/musawamah/)
3. [Bay al-muajjal (deferred-payment sale)](https://islamicopenfinance.com/glossary/bay-muajjal/)
4. [Salam](https://islamicopenfinance.com/glossary/salam/)
5. [Istisna](https://islamicopenfinance.com/glossary/istisna/)
6. [Tawarruq](https://islamicopenfinance.com/glossary/tawarruq/)
7. [Bay al-sarf (currency exchange)](https://islamicopenfinance.com/glossary/bay-al-sarf/)
8. [Murabaha to the purchase orderer](https://islamicopenfinance.com/glossary/murabaha-purchase-orderer/)

[All 221 terms](https://islamicopenfinance.com/glossary/)