Critical analysis of the definition of Murabaha Contract in Iran Banking Law

Iran Banking Law was changed basically after the Islamic Revolution, and adjustment of legal affairs with the jurisprudence and law was preferred. To eliminate the fixed interest from the banking system called Reba (usury), banks were charged to use the contracts confirmed by Islamic Law and Imami Jurisprudence based on The Law for Usury (Interest)-Free Banking. Hence, in article 98 of the 5-year Development Plan of the Islamic Republic of Iran (2010), the Murabaha contract was attached to banking contracts and the executive regulation and the executive instruction was approved by the Board of Ministers. Murabaha is one type of sale, and a binding, Deceptive, reciprocal, and possessive contract, which causes property transfer. Due to the contract, the bank as the supplier takes measures to buy needing property of the applicant. Then, with the announcement of the expenses such as property price and other expenses like transportation and insurance costs, and with the determination of the desired profit based on the price, the bank takes measure to conclude the contract with the applicant and property transfer. In this study, the definition of Murabaha is analyzed in the executive regulation. In addition to comparing it with the definitions in Imami Jurisprudence and Iran’s legal doctrine, the objections on that are discussed.