Quote:
In Lahore a customer could go to an Islamic bank and sign a contract with the bank to buy a car from them.
The bank would not loan the money but buy the car itself. Then it would sell it to the customer at a mark up.
The customer would agree to pay back the cost in instalments over a regular period.
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Isnt the markup price another name for interest. On what basis is the markup decided. Is it based on prevailing interest rates.