The Consistency of Standard Murabaha Contracts Issued by Islamic Banks in Palestine with Islamic Banking Standards

This study examines whether Murabaha contracts used by Islamic banks in Palestine comply with AAOIFI standards and mandatory national regulatory requirements, in light of the 2019 Palestinian Monetary Authority directive and the continuing issue of incomplete alignment. Despite this directive, a comprehensive review of these contracts remains lacking. This research identifies inconsistencies and proposes amendments to enhance Sharīʿah compliance. The study analyzed standard Murabaha contracts issued by Islamic banks in Palestine to assess their conformity with Islamic banking standards and national law. A brainstorming session with 16 experts was held using the Delphi methodology to discuss the findings, collect feedback, answer the research questions, and identify compliance challenges. The findings show that several contracts partially deviate from AAOIFI standards and national legal requirements, particularly in the contracting mechanism and obligations, as well as in many commitments that should be borne by the bank but were transferred to the client. This reveals practical challenges for banks in implementing full Sharīʿah compliance. Islamic banks should revise and standardize their Murabaha contracts to ensure compliance with both national law and AAOIFI standards. Regulatory authorities should enhance monitoring mechanisms to enforce adherence and support full compliance. This research provides practical guidance to improve contract compliance, supports regulatory efforts, and contributes to strengthening Sharīʿah adherence in Palestinian Islamic banking.