CASE 1: MURABAHA CONTRACT (5*5MARKS EACH =25MARKS)

By looking at the issues from the perspectives of an Islamic bank and a conventional bank, analyze in what sense Murabaha differs from conventional bank lending. Answer the following questions for both a conventional bank loan and Murabaha.

1.Critically analyze the following questions

a. Examine the key areas of concern of conventional bank loan and Murabaha in today's banking system.

b. How would you categorize the bank-customer relationship in conventional bank loan and

Murabaha?

c.Are the returns fixed or variable in both?

d. Are there any guarantees in conventional bank loan and Murabaha?

e. What happens if the borrower defaults?