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Murabaha ?
4. The issue of nominating an agent or representative Wakalah. 5. How is the profit-margins determined and are they contemporous with the
interest rate? 6. The difference in the tax systems on Murabaha applied in the respective
banks?
D. Objectives of Study
The objective of this study is to compare the use and practice of Murabaha
in the Islamic banking system where Muslims are a majority Indonesia and where Muslims are a minority South Africa.
The study will also investigate the challengers and problems faced by Indonesia and South Africa in implementing the modal of Murabaha in their
respective Islamic Banking systems, its similarities and differences, and the main reason it has become the most popular financial instrument amongst all others.
It is indeed a tragedy, that for decades many Muslim governments and so called Muslim scholars, imbued with western ideas, found serious weakness in
Islamic principles dealing with trade and commerce. They believe that without the taking and giving of interest the whole economy will be paralyzed, since it is the
pivot around which the banking system in our capitalistic economy revolves. The failure of Muslims to implement the beautiful, sound, tested and
proven economic principles, which are a combination of both material and
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spiritual values, gave ammunition to those who advocated and promoted un- Islamic economic plans. The architects to these capitalistic, communistic or
socialistic systems boldly claimed that Islam does not have a solution to modern day problems in the complex world of trade and commerce.
Islam only prohibited interest, the sale of a limited number of such items which cause harm to an individual or society and certain types of transactions.
Islam, however, encouraged trade and considered it the best of professions provided it is not propelled by greed and fuelled by exploitation like present day
economics. Islam does not encourage an economy which causes the enrichment of a few and brings misery and destruction upon the majority.
E. Significances of the Study
The significances of this study are to obtain a better understanding of the financial mode of Murabaha. The mode has been met with lots of skepticism and
doubts by Muslims and non-Muslims alike on whether there is a difference between Islamic banking and conventional western banking. These doubts have
been brought about because of the misunderstanding of the mode of Murabaha, as the facility appear similar to conventional bank financing with the profit rate or
mark-up being contemporaneous with the rate of interest. Dr. Shahid Hasan Siddiqui an eminent Pakistani banker and economist
explains in his paper Islamic Banking: True Modes of Financing
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„...When the common people realize that the net result in the transaction of the Islamic banks is the same as was in the transactions of conventional banks, they become sceptical towards
the function of Islamic banks. It therefore, becomes very difficult to argue for the case of Islamic banking before the common people, especially before the non- Muslims who feel that
it is nothing but a matter of twisting documents only…‟‟
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F. Literature Review
