An interest-bearing loan does not become lawful merely by replacing 'interest' with 'profit' or 'mark-up'. The decisive question is whether a real commodity is purchased, owned, possessed and then sold through a valid cost-plus sale (مرابحة).
This rule is especially important in financing because cost-plus sale (مرابحة) is valid only when the financing remains a real sale. The sequence of ownership, possession, risk and final sale must therefore be visible in the transaction.
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Cost-Plus Financing (مرابحة): From Sale to Banking Structure
An interest-bearing loan does not become lawful merely by replacing 'interest' with 'profit' or 'mark-up'. The decisive question is whether a real commodity is purchased, owned, possessed and then sold through a valid cost-plus sale (مرابحة).
This rule is especially important in financing because cost-plus sale (مرابحة) is valid only when the financing remains a real sale. The sequence of ownership, possession, risk and final sale must therefore be visible in the transaction.