Evaluating Murabaha in Islamic Banks

Israa Jawdat Mansour; Yousef Sa'adeh

doi:10.31686/ijier.vol4.iss7.573

Authors

Israa Jawdat Mansour Applied Science University, Jordan
Yousef Sa'adeh Applied Science University, Jordan

DOI:

https://doi.org/10.31686/ijier.vol4.iss7.573

Keywords:

Islamic Banks, Shari’a, Legitimacy, Murabaha

Abstract

After the collapse of the Islamic Caliphate in Istanbul and the loss of the First World War, Shari'a and Arabic as the law and language of the Muslim world were replaced with common laws and numerous European languages were introduced into the new Arab states. These events led to calls for reestablishing the shari’a for all aspects of life. Arab countries responded by constituting Islamic parties and institutions including Islamic banks. Islamic banks flourished quickly all over the world. Some consider this evidence of success. Most of the operations of Islamic banks (40%-80%) were in the area of Murabaha. Accounting and auditing standards were issued by the Organisation of Accounting and Auditing Standards for Islamic Financial Institutions in Bahrain (OAASIFI) in 1997 by translating the international standards so as to begin from where others reached. Many questions were raised about the lawfulness of Islamic banks operations, although there are shari’a control bodies in every bank, which make it necessary to investigate its activities. This is an analytical study of Islamic bank operations from a shari’a point view regarding Murabaha to the order of the purchaser concluding that it is far from shari’a’s principles and provisions.

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Author Biographies

Israa Jawdat Mansour, Applied Science University, Jordan

Assistant Prof., Accounting Department
Yousef Sa'adeh, Applied Science University, Jordan

Accounting, Professor in Accounting Department

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Author’s Bibliography

Doctor Israa J Mansour1, PhD in Accounting, assistant Professor in Accounting Department- Applied Science University, Amman, Jordan. Research interest (Islamic Accounting, Managerial Accounting, Accounting Information System and Financial Accounting).

Professor Yousef M Sa'adeh2, PhD in Accounting, Professor in Accounting Department- Applied Science University, Amman, Jordan. Research interest (Islamic Accounting, Auditing)