Look up: Murabaha

1. 
   Murabaha
   Cost-plus profit financing. The Murabaha technique is used extensively to facilitate the trade finance activities of Islamic financial institutions. The financial institution purchases and takes title to the necessary equipment or goods from a third party (either directly or through an agent). The financial institution then sells on the equipment or goods to its customer at cost plus profit. All of the above contracts are undertaken at the request of the customer. Deferred payment terms may be agreed and the arrangement may be secured. Such arrangements are not considered to be contrary to Shari`ah law as, by taking title to the equipment or goods, the bank is assuming a risk and engaging in a sale transaction which entitles it to profit. As the price of the equipment or goods is fixed, the customer is not affected by fluctuations in the base lending rate.
   Found on http://www.exchange-handbook.co.uk/index
   
   
2. 
   Murabaha
   `Murabaha` is defined as a particular kind of sale, compliant with shariah, where the seller expressly mentions the cost he has incurred on the commodities to be sold and sells it to another person by adding some profit or mark-up thereon which is known to the buyer. It is one of the most popular modes used by banks in Islamic countries to promote riba-free transactions. The ratio in which this instrument is being used varies from bank to bank. ...
   Found on http://en.wikipedia.org/wiki/Murabaha