Al Ijarah Thumma Al Bai Definition

In ijarah the right to use the object is transferred to the hirer not its ownership.

Al ijarah thumma al bai definition. Al ijarah thumma al bai aitab shariah compliant car financing based on the principles of ijarah thumma al bai which means lease followed with sale. Application of al ijarah thumma al bai in vehicle financing there has been a proposal by an islamic financial institution to introduce vehicle financing based on al ijarah thumma al bai aitab concept. The financing based on aitab involves two types of contracts namely leasing. Is there a distinction.

Bai bithaman ajil bba sale contract based on deferred installment payment at. The first contract is an ijarah that outlines the terms for leasing or renting over a fixed period and the second contract is a bai that triggers a sale or purchase once the term of the ijarah is complete. Hence ijarah is a sale of usufruct not of a physical entity. The first contract in this serial process is known as ijarah and its purpose is to outline all of the terms for the leasing or the renting.

Ijarah thumma al bai hire purchase parties enter into contracts that come into effect serially to form a complete lease buyback transaction. Juristic fiqh definition ijarah refers to a contract to utilize a lawful benefit against a consideration al zuhayli 2002. Al ijarah and al ijarah thumma al bai aitab motor vehicle financing siti munirah abd wahab nur wirda ahmed 2. Al ijarah ijarah is an arabic term with origin in islamic meaning to give something on a rental basis or wages it is islamic alternative to conventional leasing.

Ijara thumma al bai synonyms ijara thumma al bai pronunciation ijara thumma al bai translation english dictionary definition of ijara thumma al bai. News related to ijarah thumma bai 25 leasing versus ijarah. A form of ethical investments bound by the precepts of islam particularly the prohibition of interest payments. The principle governing an ijarah contract at the end of the lease period when the lessee buys the asset for an agreed price through a purchase contract.

Evidences owning the benefit of certain assets for a specific period of time by paying an agreed sums of rental with an agreement pillars that the owner will transfer the rented asset to the hirer at the end of the agreed period or during the period. Ijarah thumma al bai means hire purchase it refers to how parties will enter into contracts which come into effect in a serial manner in order to form a complete lease or buyback transaction. Up to 9 years. Al ijarah thumma al bay aitab aitab also known as ijarah wa iqtina or al definition ijarah muntahiya bi tamlik definition.