Murabaha Mortgage Backed Securities, A New Financial Instrument for Islamic Banking

Banks as one of the important institutions in money market has an undeniable role for financing different plans like: productive, services and business. Now there are some problems for banks to finance themselves. Mortgage backed-securities are one of the prevalent ways of financing in the banks. It has a long history in the conventional banks. Designing and creating new financial instruments in the banks are possible now. This paper tries to introduce a new financial instrument in the Islamic banking; it’s consists of two parts, at first we take a look at the history of securitization in conventional banks and the process of securitization with its risks, and then in the second part we introduce a new designed financial instrument to securitize bank’s assets. This paper assesses the compatibility of Murabaha mortgage-backed security from the perspective of jurisprudences and financial market.