Ijarah Thummal Bai’ (ITB) Financing
ITB Financing is a facility that allows the customer (lessee) to hire the identified asset (machinery, equipment and/or commercial vehicles for business purposes) from the Bank (lessor) and subsequently purchase and take ownership of the asset upon settlement of the final instalment (rental).
Shariah Concept
The Shariah concepts applied are Ijarah, Wakalah, Bai’ & Wa’d.
ITB Financing is a leasing (Ijarah) contract to be followed by sale by way of conduct (Bai’ Mu’atah). Under the leasing contract, the customer leases the asset from the Bank at an agreed rental payment within a specific period. Upon expiry of the leasing period, the sale of lease asset from the Bank to Customer shall be effected by way of conduct based on agreed price.
In the occurrence of any event of default or the lease is dissolved before its maturity, the customer is required to purchase the asset from the Bank based on promises and undertakes (Wa’d) given by the customer to the Bank.
Under the Wakalah, the Bank appoints the customer as an agent to do all acts with respect to the purchase of the asset from the dealer on behalf of the Bank.
The customer shall pay the security deposit (Urbun) to the dealer, which shall be considered as the deposit to be paid by the Bank..
The usage of the asset by the customer is at the customer’s risk and the Bank shall have no responsibility or liability for any loss or damage to the asset resulting from the customer’s negligence.
The Bank also appoints the customer as its service agent in all matters pertaining to the major maintenance on behalf of the Bank and also ordinary maintenance and repair. The customer as service agent will bear all the costs, charges and expenses in carrying out the major and ordinary maintenance and repair.
Product Disclosure Sheet
