What is Ijarah Thumma Al Bai?
Al-Ijarah Thumma Al-Bai’ (AITAB) is a Syariah-compliant car financing based on the principles to lease (Ijarah) followed by sale (Al-Bai’). Customer during the leasing contract should pay at an agreed rental payment over a specific period.
What is mudarabah contract?
Mudarabah or “Sharing the profit and loss with venture capital”, is a partnership or trust financing contract (similar to western equivalent of General and Limited Partnership) where one partner (rabb-ul-mal or “silent partner”/financier), gives money to another (mudarib or “working partner”) for investing in a …
What is exchange based contract?
A contract (aqd) that involves the exchange of one counter-value for another. For example, exchanging a commodity for an amount of money (price) is one form of an exchange-based contract.
What is the Shariah concept underlying the transfers of the ownership of a usufruct of an asset?
In the Islamic finance industry, the term ijarah is broadly understood to mean the ‘transfer of the *usufruct of an asset to another person in exchange for a rent claimed from him’ or, more literally, a “lease”. The SPV buys the asset from a seller.
What is ijarah wa Iqtina?
Ijarah wa-iqtina (literally, “lease and ownership”) is also called al ijarah muntahia bitamleek (“lease that ends with ownership”). Like a ijara thumma bay`, it may involve both a lease contract and a sale contract. The “promise” to transfer the ownership should be unilateral and should be binding only on the lessor.
What is Commodity Murabahah?
Commodity Murabahah is the purchase of certain specified commodities on a cost plus profit basis (Murabahah) agreed upon by both parties (buyer & seller) and subsequently, the commodity is sold to another commodity trader (third party) with the objective of obtaining cash.
What is a Murabaha agreement?
The Murabaha is a form of cost plus financing where a Financier will purchase an asset and sell it on to a Company for an amount made up of the cost of the asset plus a profit margin for doing the transaction. STEPS. 1. The Financier and the Company enter into a sale and purchase agreement in respect of the asset.
What is Murabaha and Mudaraba?
of equity-based profit and loss sharing methods within Islam known as mudaraba (trust. financing), musharaka (participating finance), murabaha (cost plus trade financing) and. sukuk (Islamic bonds).
What is the difference between wakalah and Kafalah?
Wakalah refers to a contract in which a party (muwakkil) authorizes another party as his agent (wakil) to perform a particular task, in matters that may be delegated, either voluntarily or with imposition of a fee (Bank Negara Malaysia, 2015). Kafalah is an Arabic word for responsibility, amenability or suretyship.
What is Tawarruq contract?
Actually, tawarruq is a sale contract, whereby a buyer buys an asset from a seller on deferred payment and subsequently sells the assets to the third party for cash, with a price lesser than the deferred price.
What is sukuk Mudharabah?
Sukuk al mudaraba (sukuk based on equity partnership) In simple mudaraba contracts, investors are considered to be silent partners (rab al mal), and the party who utilizes the funds is the working partner (mudarib). The profit from the investment activity is shared between both parties based on an initial agreement.