The Problem with Tawarruq

Ismail Desai Islamic Finance Instruments Leave a Comment

Definition of Tawarruq (Monetization): refers to the process of purchasing a commodity for a deferred price determined through Musawama (Bargaining) or Murabaha (Mark-up Sale), and selling it to a third party for a spot price so as to obtain cash. Whereas Inah refers to the process of purchasing the commodity for a deferred price, and selling it for a lower …