Issues of Possession in Murabaha Financing

Abstract

Possession is an important condition of the Islamic law of contract. Today, numerous banks are operating under Islamic banking principles. Therefore, it is an important requirement of the Islamic financial institutions to carry out transactions in accordance with the rules of Sharia. According to Sharia, any transaction without possession is considered void. On the other hand, possession is an important condition in all the modes of the Islamic finance, especially in a Murabaha contract. The concept of possession is simple; however, its implementation is difficult. This paper aims to discuss the practical issues of possession in execution of Murabaha Financing.