Dr. Yusuf Al-Qaradawi says: “Before giving the verdict regarding the Murabahah transaction, let’s look at it through an example. A man who owns a hospital goes to an Islamic bank and says to the banker: I need to buy a modern medical apparatus, the price of which I cannot afford for the time being. I do not want to resort to the non-Islamic banks to take an interest-based loan. Therefore, can your bank help me in this without being involved in riba? Can your bank afford to buy the apparatus for me with a considerable profit margin stipulating that I pay the price in a defined period of time?
The banker replies: Yes. We can buy that apparatus with the specifications you define and from the retailer you choose, stipulating that the bank gets a given sum of money or a given rate of the profit. You can pay the price after a while as you desire. But, the transaction will not be effected till the bank actually buys the aforementioned apparatus and owns it itself or through its deputy. This is done this way in order for the bank to sell what it already has and owns.
Therefore, between the bank and you (owner of the hospital) is a mere promise to sell the commodity to you after it is actually owned by the bank.
The man says: Then the bank is held responsible for buying, paying for, transporting, and shipping the appointed apparatus. The bank is also responsible for the damage that may be caused to the apparatus through all these procedures. Moreover, if any defect appears in the apparatus, the bank will be responsible for returning it according to the defined legalities.
The banker says: Yes, sure. But the bank is afraid that after fulfilling your desire and buying the medical apparatus, you refrain from taking it from the bank, which can be disastrous to the bank and its clients.
The man says: When a Muslim promises, he does not break his promise. I am ready to sign any papers that make the bank sure I am going to buy the apparatus from it. But, what makes me sure that the bank will not give the apparatus to anyone else on the pretext that he will pay a higher price than the one agreed upon?
The banker says: The bank is committed to its promise in the same way. We are ready to sign whatever papers may be required to be sure of that.
The man says: It’s a deal.
The banker says: Let’s sign these papers. You sign an order in which you express your intention to buy the apparatus and a promise that you will take it from us, along with a promise on the bank’s part that it will submit the apparatus to you and no one else.
This is Murabahah which has been approved by all the legal bodies in many Islamic banks and which has gained approval through many Fatwas issued by scholars.”
In addition, the Islamic Bank conference held in Dubai, in Jumada Al-Akhirah 1399 AH\1979 AC., in which 59 scholars from all around the world met, approved a similar form of transaction.
Also, in the second Islamic Bank conference held in Kuwait in Jumadah Al-Akhirah 1403 AH\March 1983 AC, with participants from 12 Islamic financial organizations along with a great number of scholars, it was unanimously agreed that such transaction is permissible.