@article{(Open Science Index):https://publications.waset.org/pdf/12414,
	  title     = {Shariah Views on the Components of Profit Rate in Al-Murabahah Asset Financing in Malaysian Islamic Bank},
	  author    = {M. Pisol B Mat Isa and  Asmak Ab Rahman and  Hezlina Bt M Hashim and  Abd Mutalib B Embong},
	  country	= {},
	  institution	= {},
	  abstract     = {Al-Murabahah is an Islamic financing facility used in
asset financing, the profit rate of the contract is determined by
components which are also being used in the conventional banking.
Such are cost of fund, overhead cost, risk premium cost and bank-s
profit margin. At the same time, the profit rate determined by Islamic
banking system also refers to Inter-Bank Offered Rate (LIBOR) in
London as a benchmark. This practice has risen arguments among
Muslim scholars in term of its validity of the contract; whether the
contract maintains the Shariah compliance or not. This paper aims to
explore the view of Shariah towards the above components practiced
by Islamic Banking in determining the profit rate of al-murabahah
asset financing in Malaysia. This is a comparative research which
applied the views of Muslim scholars from all major mazahibs in
Islamic jurisprudence and examined the practices by Islamic banks in
Malaysia for the above components. The study found that the shariah
accepts all the components with conditions. The cost of fund is
accepted as a portion of al-mudarabah-s profit, the overhead cost is
accepted as a cost of product, risk premium cost consist of business
risk and mitigation risk are accepted through the concept of alta-awun
and bank-s profit margin is accepted as a right of bank after
venturing in risky investment.},
	    journal   = {International Journal of Economics and Management Engineering},
	  volume    = {6},
	  number    = {7},
	  year      = {2012},
	  pages     = {1923 - 1928},
	  ee        = {https://publications.waset.org/pdf/12414},
	  url   	= {https://publications.waset.org/vol/67},
	  bibsource = {https://publications.waset.org/},
	  issn  	= {eISSN: 1307-6892},
	  publisher = {World Academy of Science, Engineering and Technology},
	  index 	= {Open Science Index 67, 2012},
	}