What is your understanding of Murabaha? How is Murabaha implemented Bank Muamalat Indonesia’s banking system? What products are financed on the murabaha facility? Murabaha is deemed by many scholars as not a true mode of Islamic finance,
INTERVIEW
Name : Mr Ahmad Fauzi
Position : Financing, Supporting Division
Company : Bank Muamalat Indonesia
TimePlace : 05 November 2010, Bank Muamalat
1. What is your understanding of Murabaha?
Murabaha is a type of financing provided for customers who wish to purchase an item which will allow them to pay the price in instalments over a period of
time. In the case of a bank, the customer would approach the bank, the bank would purchase the item wanted by the customer, and then resell it to the
customer at an agreed mark-up. The customer would then pay the amount owed to the bank in instalments. And this is basically the common or universal
understanding of murabaha.
2. How is Murabaha implemented Bank Muamalat Indonesia’s banking system?
Murabaha is applied in Bank Muamalat Indonesia whereby the Bank will buy any halal goods that you need and then sell them to the client to be paid
periodically installments according to their ability. This facility can be used to deal with business needs either working capital or investment: procurement of
capital goods such as machinery, equipment, etc. or private needs e.g. purchase of motor vehicles, homes, etc.
3. What products are financed on the murabaha facility?
We provide two types of murabaha financing facilities, namely investment murabaha product and murabaha for working capital. The investment murabaha
product is utilised for consumable products such purchasing a car, house or even for the purchase of products and materials for renovation. In the case of working
capital, say a person wants to expand his business, we provide murabaha facility in assisting the person in developing his business. But we can only provide the
materials on a murababa facility and not cash, or labour.