Islamic Contract – Bay’ al-Murābahah: Murābahah Involving Ribawī Items Such as Gold

​Islamic Contract – Bay’ al-Murābahah: Murābahah Involving Ribawī Items Such as Gold


Q1: Is it permissible to sell ribawī items such as gold through murābahah?


Answer:
Yes, it is permissible to sell ribawī items such as gold through murābahah, provided that the rules of ribā in Islamic law are strictly observed.


Gold is classified as a ribawī item. Therefore, transactions involving gold must comply with the Shariah rules governing the exchange of ribawī items.


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Q2: Is the exchange of gold for money permissible in murābahah?


Answer:
Yes. The exchange of gold for money is generally permissible because they are of different categories:

• gold is a ribawī commodity; and

• money functions as currency.

However, the transaction must fulfil the Shariah requirement of:

• immediate exchange (taqabud or possession); and

• absence of ribā and excessive uncertainty.

If the murābahah transaction involves deferred payment, scholars have discussed the issue extensively because gold and currency are both ribawī items associated with monetary value.


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Q3: Why is deferred payment involving gold controversial?


Answer:
The controversy arises because classical Islamic law treats gold and silver as currency. Under the rules of bay‘ al-sarf (currency exchange):

• the exchange of gold and money must generally occur on a spot basis; and

• deferment by one or both parties may lead to ribā al-nasī’ah (ribā due to delay).

For this reason, many classical scholars prohibit deferred sales of gold for money.


However, some contemporary scholars and Shariah standards permit deferred murābahah involving gold if:

• the gold is treated as a commodity rather than currency;

• ownership and possession are properly transferred; and

• the transaction avoids speculative or interest-based elements.

This approach is commonly adopted in certain Islamic banking and commodity murābahah practices today.


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Case Scenario 1: Permissible Spot Transaction


A jewellery shop sells a gold bracelet worth RM8,000 to a customer. The customer pays the full amount immediately, and the gold bracelet is handed over on the spot.


Analysis

• Gold is exchanged for money immediately.

• Both payment and delivery occur at the same session.

• No ribā arises.

This transaction is generally permissible under Shariah.


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Case Scenario 2: Problematic Deferred Transaction


A seller agrees to sell 100 grams of gold to a buyer today, but the buyer will only pay six months later.


Analysis

• Gold and money are exchanged on a deferred basis.

• Delay in payment may lead to ribā al-nasī’ah.

• Many classical scholars consider this impermissible.

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Case Scenario 3: Contemporary Murābahah Practice


An Islamic bank purchases gold bullion as a commodity investment and subsequently sells it to a customer through a structured murābahah arrangement. The bank first acquires ownership and possession of the gold before reselling it at a disclosed markup.


Analysis

• The transaction is structured as a commodity sale.

• Ownership transfer is essential.

• The permissibility depends on compliance with contemporary Shariah standards and regulatory guidelines.

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Notes: Important Rules on Gold in Murābahah


Permissible Situations

• Gold may be sold for money on a spot basis.

• Ownership and possession must be genuine.

• Cost price and profit must be disclosed in murābahah.

Impermissible Situations

• Exchange of gold for gold with unequal quantities.

• Deferred exchange that leads to ribā.

• Transactions involving speculation or fictitious ownership.

Key Principle


The main objective is to ensure that the transaction remains a genuine sale and does not become a disguised form of interest-based financing.