Murabaha markup funds sharia

Following up on last Wednesday’s post about murabaha, a typical home loan obtained through sharia finance would look something like this chart:

The bank holds the title until the borrower has paid off the loan, although some sharia bankers have even figured out ways to go ahead and transfer the title to the borrower immediately.

One question springing immediately to mind when looking at this chart and seeing “Payment of Marked Up Price (P+X)” is “what is X“?

X is often called a markup.  Kind of like, um, well, an interest charge.  Except the sharia bankers have to call it “X” or “markup” or “profit”—just so long as you don’t call it riba or interest.

But whether murabaha is halal or haram is a somewhat distracting issue.  The main problem with murabaha isn’t whether it is genuinely Islamic or an infidel copycat financial instrument.  The main problem is that X doesn’t just equal profit.

X goes into the revenues of the Islamic bank.  A portion of X is diverted into the Islamic bank’s zakat account.  X is overseen by virulent anti-Semitic and terrorist sympathizing Islamic scholars sitting on the bank’s sharia advisory board who have been documented to transfer a portion of X from their bank’s zakat fund as “charity” for jihadist militants in accordance with their Koran.

Muslims say they invented algebra, but they won’t tell you what the X really stands for in this equation.

The X, it must be said, is for sharia.