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Among the many Islamic Financial products offered by Islamic Financial Institutions in Maldives, Murabaha is the simplest and the easiest one for the masses to understand it's modus operandi.
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The simplest definition of Murabaha would be to simply buy and Asset and sell it with a Markup profit. The cost and the profit must be disclosed and known to the purchaser. Mutual understanding and agreement of the prices stated is the basis for it's legality.
You can even agree on the method of repayment, tenure, etc; it is important that full disclosure of all financials relating to asset procured must happen and both parties will mutually agree on this. No hidden costs.
When we have such a product where the masses can fully comprehend it's technicalities, why aren't we resorting to the usage of this particular product without resorting to several other products with a different methods of operation confusing the buyers?
Instead of Dimnishing Partnership, Why can't we use Murabaha to Purchase an apartment?
You see, the structure of Murabaha requires the ownership to pass from the Initial Sellor
Bank/Financial Institution End User/Customer.
You see, the structure of Murabaha requires the ownership to pass from the Initial Sellor
Bank/Financial Institution End User/Customer.
1. Maldives Islamic Bank and HDFC Amna , providing housing finance, both have foreign shareholders and the law explicitly states a foreign parties cannot own any part of land/property. The ownership cannot be transferred to the bank.
2. Even if we are able to transfer, like the case of BML Islamic, which is 
locally owned bank, this would escalate the prices for the apartment as for each ownership change, GST, and other related taxes would apply making it more expensive due to double taxation.
locally owned bank, this would escalate the prices for the apartment as for each ownership change, GST, and other related taxes would apply making it more expensive due to double taxation.
Unless the laws are amended to specifically accommodate the unique structure of each Islamic financial product, not all can be applicable and used for each and every case.
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