By Abdullahi Saliu Ishola, & Isa Olawale Solahudeen
Abstract
The emergence of the Islamic banking system led to the introduction of some financial transactions which were not hitherto considered in the classical books on Islamic financial system. Murabahah is one of such innovations. Like most of those newly introduced products of the Islamic Financial System or Arrangement (IFS or IFA), otherwise referred to as Products of Islamic Banking (PIB) or Products of Islamic Finance (PIF), arguments have been canvassed for and against the legality of Murabahah under Islamic Financial Principles (IFP). Of all the criticism against its operation, the most pronounced deprecation against it posits that, Murabahah is too close to interest transaction in the conventional banks, and cannot therefore be legally allowed in IFS. This paper examines the criticism and posits whether the criticism is tenable or not on the scale of the Islamic Law and given the financial market challenges facing the contemporary Muslim world.
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