Conventional banks do not buy or sell the product; their activity is limited to borrowing and lending.
Basically, conventional banks borrow from the public through deposits. Then they lend the money with interest.
This increase in the money value is called Riba which is not obtained from any economical activity.

Conventional banks work through borrowing a certain amount of money then lending the very amount at a higher rate. This is prohibited in Islam. The concept of Riba is not only limited to the amount of money charged after a delay in the payment.

No
- Riba takes place when two equals are charged differently (money for money or gold for gold).
- On the other hand, should the buyer delay his payment to the seller, the final price won’t be affected, i.e. no extra charges shall be incurred on the buyer.
- From the economic viewpoint, a dollar today is worth more than a dollar tomorrow, since prices vary from time to time and the seller needs to take precautions against future economic conditions
- Economy necessitate this kind of selling since recession could take place if people not having full amount in cash held back from buying products through installments.

No.

This will help in determining the exact moment the seller starts to bear any risk the product may face upon delivering it to the buyer.

It’s imperative to recognize the product before selling it, since the seller needs to identify the product.

Bai’El Ina is prohibited in Islam. An example of such is when a man buys a car from some agency for $50,000 and then he sells the same car back to the same agency for $45,000. The difference in the price is Riba. He may sell the car back for the same or a higher price but mot for less.

- Tawarruq on the other hand is getting a car for instance, through monthly installments and then selling the same car to another party for cash. This is allowed in Islamic finance.

Bai’atain fi Bai’a (two trades in one), as the name suggests means carrying out two trades at once. For instance, when a seller announces that he’s selling a certain product for $1100 at the present time and for $1000 at a future time and the buyer agrees. Another example is when someone offers someone else his car in exchange for the other’s car or house. This is not permissible since the trade is associated with an unknown factor that affects the product value, and may be subjected to Riba.

That is not permissible, since the client has already participated in the trade transaction.

This is not permissible, since the wages are considered a debt accrued on the client.

The company should bear the costs of insurance when possessing the product, however; the company could later add this amount to the cost of sales and consequently to Murabaha’s price.