Murabahah (Cost plus profit)

Murabahah Financing is a sale in which the mark-up is disclosed to the member as per the seller’s purchase price for a trust- sale of a certain specified commodity. It may be contracted either on a cash basis or deferred payment basis. The beneficial member in a murabahah contract is pre-informed of how much cost is incurred, and how much profit is earned in addition to the cost of the commodity.