In Islamic banking, a purchase and repurchase agreement in which an asset is acquired by the bank on behalf of a customer. The customer buys the asset from the bank at a predetermined repurchase price. This price includes the bank’s costs as well as any appreciation and risk premium (a financial institution plays a role of sales intermediary, buying goods needed by clients and then selling them on later at a profit. This is similar to securitization and nominee agreements). – See ijara, istisna, mudaraba, musharaka, option, qard al-hasan, salam, sukuk, interest prohibition.
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