Ijarah - Complete - IJARAH Pr esen Pr esentation Outline...

Info iconThis preview shows pages 1–12. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: IJARAH Pr esen Pr esentation Outline Concept of Ijarah Process of Ijarah AAOIFI Sharia Standard # 9 Promise to Lease Acquisition of the Asset Subject Matter of Ijarah Rules governing Lease Rentals Guarantees in Ijarah Contract Transfer of Ownership Concept of Ijarah Pr esen I JARAH Literally Ijarah means To give something on rent The term Ijarah is used in two context: 1. To employ the services of a person on wages e.g. A hires a porter at the airport to carry his luggage. 2. Another type of Ijarah relates to paying rent for use of an asset or property defined as LAND in Islamic Economics Pr esen I JARAH Ijarah is an Islamic alternative of Leasing. Leasing backed by an acceptable contract is an acceptable transaction under Shariah. The question of whether or not the transaction of leasing is Shariah compliant depends on the terms and conditions of the contract. Several characteristics of conventional agreements may not conform to Shariah, thus making the transaction un-Islamic and thereby invoking a prohibition. Process of Ijarah Pr esen I JARAH CUSTOM ER I SLAM I C BANK The customer approaches the Bank with the request for financing and enters into a promise to lease agreement. The Bank purchases the item required for leasing and receives title of ownership from the vendor The Bank makes payment to the vendor VENDOR . . Agreemen t-1 Pr esen I JARAH CUSTOM ER I SLAM I C BANK The Bank leases the asset to the customer after execution of lease agreement. The customer makes periodic payments as per the contract. Title transfers to the customer at the end of lease term. VENDOR . . Agreemen t-2 Rules of Ijarah Pr esen Pr omise to Lease Master Agreement A master agreement may be drawn up covering a number of Ijarah transactions between the institution and the customer, setting out the general terms and conditions of agreement between the two parties. There may either be a separate lease contract for each transaction, or alternatively the two parties may exchange notices of offer and acceptance by referring to the terms and conditions contained in the master agreement. Pr esen Pr omise to Lease Security Deposit It is permissible to require the lease promisor (customer) to pay a sum of money to the institution to guarantee the customers commitment of accepting a lease on the asset and the subsequent obligations....
View Full Document

Page1 / 61

Ijarah - Complete - IJARAH Pr esen Pr esentation Outline...

This preview shows document pages 1 - 12. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online