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Islamic Finance


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Buyu Muharramah


Arabic (بيوع محرمة) for prohibited sales; a category of buyu (pl. of ba’i or bay’) that consists of all sales that are impermissible under shari’a due to a strict prohibition involving 1) the object of sale: a prohibited item such as pork and wine, etc. 2) the existence of a major prohibition element, such as riba (as in riba-bearing sales, or buyu ribawiah) or excessive gharar (as in buyu al-gharar) associated with the contract or transaction, 3) the existence of a condition/ stipulation that transpires into riba or excessive gharar elements and 4) incorporation of a condition/ stipulation that contradicts or defies the particular purpose of the contract (muqtadha al-aqd).

Examples of sales prohibited for inclusion of riba: ba’i al-einah, and for association with excessive gharar (gharar fahish): ba’i al-munabazhah and ba’i habal al-habalah, and for existence of both riba and excessive gharar: ba’i al-dain.

Examples of a sale embedded with invalid stipulation that renders it impermissible: ba’i wa salaf.


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