Investing in value added production process as well as in working capital, and making Murabaha more effective, competitive, and lowest cost for the Customers of Islamic banks

The objective of this study is to analyze why the current Murabaha pricing of Islamic banks is inefficient, expensive, and least competitive compared to new Murabaha price suggested in this study. This study is based on a theoretical mathematical model where a few theorems have been established about the new Murabaha pricing and the inefficiency of current Murabaha pricing. The study suggests that the new Murabaha pricing for Islamic banks is efficient, competitive, and cheaper for the customers and it is expected that the market share of Islamic banks will expand rapidly. If the Islamic banks adopt the new Murabaha pricing as developed in this study, more and more customers will join and the manufacturing sector, as well as the real economy will grow which in turn, will increase real GDP, employment, and prosperity of the economy. This study will be immensely useful to Islamic bankers, Shariah Scholars, Central Bank, Governments, policy makers, research scholars, students, and academicians across the world.