Murabahah with Wakalah? Is it OK?

Murabahah is one of the most popular financing products in Islamic banking, where the bank buys goods on behalf of the customer and resells them to the customer with an agreed profit margin. Meanwhile, wakalah is a representative contract in which a person or institution appoints another party to perform an action on their behalf. The combination of these two concepts is often used in Islamic banking practices. However, the question is, is this combination of Murabahah and Wakalah permissible under sharia law?

Murabahah in Shariah Perspective

Murabahah is a sale and purchase contract in Islam where the seller discloses the cost of the goods being sold as well as the desired profit margin to the buyer. It is one of the permissible forms of sale and purchase as it fulfils the principles of transparency and honesty. In the context of Islamic banking, murabaha is used as a financing product where the bank buys the goods desired by the customer and then resells them to the customer at an agreed price, including a profit margin. This concept differs from conventional lending as there is no element of riba (interest) involved.

Wakalah in Shariah Perspective

Wakalah is a contract in Islam in which one party (muwakkil) authorises another party (deputy) to perform a certain task or transaction on their behalf. This delegation can cover a wide range of activities, including financial transactions, purchasing goods, or representing the authorising party in legal matters. The deputy acts within the scope of the authority granted by the muwakkil and must comply with Shariah principles in carrying out the delegated task.

Murabahah with Wakalah

The combination of Murabahah and Wakalah in Islamic banking practice often occurs when the bank appoints the customer as a representative to purchase the goods ordered. The DSN-MUI fatwa regarding this can be seen in the DSN MUI fatwa no 04/DSN-MUI/IV/2000 regarding Murabahah as follows:

‘4. The bank purchases the goods required by the customer on its own behalf, and this purchase must be legal and free of usury.

…

9. If the bank wants to represent the customer to purchase goods from a third party, the murabaha sale and purchase agreement must be done after the goods, in principle, become the bank’s property.’

Meanwhile, AAOIFI regulates wakalah in murabaha financing in its sharia standard as follows:

‘الأصل أن تشتري المؤسة السلعة بنفسها مباشرة من البائع ، ويجوز لها ذلك عن طريق وكيل غير الآمر بالشـــراء، ولا تلجأ لتوكيــل العميل (الآمــر بالشـــراء) إلا عند الحاجــة الملحة. ولا يتولى الوكيل البيع لنفســه، بل تبيعه المؤسة بعد تملكها العين، وحيئذ يراعى ما جاء في البند .٥/١/٣

٤/١/٣ يجب اتخاذ الإجراءات التي تأكد المؤســـة فيها من توافر شروط محدة في حالة توكيل العميل بشراء السلعة، ومنها:

(أ) أن تباشر المؤسة دفع الثمن للبائع بنفسها وعدم إيداع ثمن الســلعة في حســاب العميل الوكيــل. كلما أمكن

ذلك.

(ب) أن تحصل من البائئع على وثائق للتأكد من حقيقة البيع.

٥/١/٣ يجــب الفصل بيــن الضمانين: ضمان المؤســة، وضمان العميل الوكيل عن المؤسسة في شراء السلعة لصالحها، وذلك بتخلل مدة بيــن تنفيذ الوكالة وإبرام عقــد المرابحة. من خلال الإشــعار من العميل بتنفيذ الوكالة والشــراء، ثم الإشـــعار من المؤسة بالبيع (ينظر الملحق ‘أ’ والملحق والملحق ‘ب’). ’

‘3.1.3.The institution shall purchase the asset itself directly from the seller, but may do so through an agent other than the customer, and shall not use the customer as a representative (booker) except in urgent circumstances. (The customer’s representative does not sell for himself, but the institution sells after taking possession of the property, and then the provisions of clause 5.1.3 should be taken into consideration.

4.1.3 Procedures should be taken to ensure that the Institution ensures that certain conditions are met in the event that a customer authorises an agent to purchase an asset, including

(a) The institution should proceed to pay the price to the seller itself and should not hold the commodity price in the customer’s bank account. If possible.

(b) Obtaining documents from the seller to confirm the correctness of the sale.

5.1.3 The two guarantees should be kept separate: The guarantee of the institution and the guarantee of the customer who represents the institution in purchasing the asset on its behalf, during the period between the execution of the agency and the signing of the Murabaha contract By notifying the customer of the execution of the wakalah and the purchase, and then notifying the institution of the sale (see Appendix A, Annex A and Annex B). ’

So from the 2 standards above there are several things that must be considered:

1.Originally, Islamic financial institutions buy murabaha assets themselves and do not represent them to customers.

2.If the Islamic financial institution represents the customer to purchase murabaha assets, the following conditions apply:

a.The Islamic financial institution must sell the asset itself to the customer and not represent the customer to sell it to himself.

b. The Islamic financial institution must ensure the receipt of the asset before selling it to the customer.

c. Murabahah assets before being sold to customers are still under the responsibility of Islamic financial institutions.

Conclusion

Based on the DSN-MUI fatwa and AAOIFI standards, the combination of Murabahah with Wakalah is allowed in sharia, as long as all parties involved comply with the established principles. This provides flexibility in Islamic banking practices while maintaining the integrity of sharia.

Also read:Murabaha an Islamic Procurement Financing Solution 

Murabahah with Wakalah? Is it OK?

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