a ijara home finance
TRANSCRIPT
8/13/2019 A Ijara Home Finance
http://slidepdf.com/reader/full/a-ijara-home-finance 1/13
Islamic Home Finance ProcessFlow
8/13/2019 A Ijara Home Finance
http://slidepdf.com/reader/full/a-ijara-home-finance 2/13
IJARAH WA IQTINA'AIJARAH WA IQTINA'A
ISLAMIC HOME FINANCE
8/13/2019 A Ijara Home Finance
http://slidepdf.com/reader/full/a-ijara-home-finance 3/13
Ijarah is a lease contract where the financial Institution purchase an asset / a property on thepromise of the customer to lease it from Financial Institutions and pays lease rental forspecific duration of time to derive specific benefits (usufruct) from the use of theasset/property.
• Asset / Property ownership remains with the Financial Institution (Lessor)
• Lessor is liable for the eneral maintenance of the asset / property! but the
responsibility is deleated to the Lessee.
• Lessee is oblied to maintain the asset / property in ood condition
• Lessor is responsible in case of loss of the leased asset/property
(unless due to negligence of the lessee).
• In case of total loss! the lease contract is terminated
• "uarantees! mortaes! liens on receivables are permitted.
What is Ijarah?
Some major features of an Ijarah transaction:
IJARAH
8/13/2019 A Ijara Home Finance
http://slidepdf.com/reader/full/a-ijara-home-finance 4/13
Ijarah Home Finance is an asset bac#ed financin contract where
$A%&A'% buys an asset/property identified by the customer! as
per his reuest/promise and then lease it to the customer at an
areed lease rental for a specific duration of time to derive specific
benefits (usufruct).
IJARAH WA IQTINA’A IJARAH HOME FINANCE!PRODUCT DEFINITION & FEATURES
8/13/2019 A Ijara Home Finance
http://slidepdf.com/reader/full/a-ijara-home-finance 5/13
Item Mortgage Loans Ijarah
ost competitive $esidential apartments * villas Land to be developed by selected developers +ith or without salary transfer commitments $epayment Period up to ,- years ortae amount up to 01ompetitive * attractive rates
2ransparent fee structure 3ero 4arly 5ettlement chares
The product features of mortgage loans will be applicable for Ijarah and
Forward Lease whilst compl!ing with Shari"ah #rinciples$
IJARAH WA IQTINA’A IJARAH HOME FINANCE!PRODUCT DEFINITION & FEATURES
8/13/2019 A Ijara Home Finance
http://slidepdf.com/reader/full/a-ijara-home-finance 6/13
(,) Purchased based on promise
(6) Promise to lease
if purchased
Payment to the
developer
(7) I8arah wa itina9a 1ontract
% the ownership of the leased asset ma! be transferred from lessor to lessee:
: at the end of the lease period as a ift or for a to#en consideration (preferable as a "ift)
: within an areed time frame before e;piry of the lease period
&ustomer
'(u!er)
*e+eloper
'Seller)
Aree terms on the property
(<) Lease rental payments %
IJARAH WA IQTINA’A IJARAH HOME FINANCE!DOCUMENTATION AND PROCESS FLOW
RAKBANK
8/13/2019 A Ijara Home Finance
http://slidepdf.com/reader/full/a-ijara-home-finance 7/13
1ustomer shall reuest $A%&A'% to purchase an asset / a property withan underta#in / promise from the customer to lease the same from$A%&A'%.
$A%&A'% purchases the asset from the =endor/>eveloper.
$A%&A'% then leases the asset to the customer as per his/her promise.
Periodical rentals are collected by $A%&A'%. 2he rentals need to besufficient enouh to cover the oriinal cost of the asset/property plus the
profit (in the form of lease rentals) reuired by $A%&A'%.
IJARAH WA IQTINA’A IJARAH HOME FINANCE!DOCUMENTATION AND PROCESS FLOW
8/13/2019 A Ijara Home Finance
http://slidepdf.com/reader/full/a-ijara-home-finance 8/13
&ooperation
,greement
'(an- .
*e+eloper)
&ooperation,greement
'(an- .
*e+eloper)
#urchase
,greement
'(an- .
&ustomer)
#urchase
,greement
'(an- .
&ustomer)
#romise to
Lease
'&ustomer)
#romise to
Lease
'&ustomer)
#urchase
/nderta-ing
#urchase
/nderta-ing
Tripartite
,greement
'&ustomer
(an- .
*e+eloper
Tripartite,greement
'&ustomer
(an- .
*e+eloper
1
2
3
4
5
6
7
8
Standard Sale
. #urchase
,greement
'(an- .
*e+eloper)
Standard Sale
. #urchase
,greement
'(an- .
*e+eloper)
Lease
,greement
Lease
,greement
Ser+ice
,genc!
,greement
Ser+ice
,genc!
,greement
Sale
/nderta-ing
9
IJARAH WA IQTINA’A IJARAH HOME FINANCE!DOCUMENTATION AND PROCESS FLOW
8/13/2019 A Ijara Home Finance
http://slidepdf.com/reader/full/a-ijara-home-finance 9/13
&ooperation
,greement
'(an- .
*e+eloper)
&ooperation
,greement'(an- .
*e+eloper)
&etween whom? $A%&A'% and >eveloper
+hy this Areement (Purpose/$eason)?
2o establish relationship with the >eveloper to finance his property to potential
customers by $A%&A'%! similar to a @.
1
#romise toLease
'&ustomer)
#romise to
Lease
'&ustomer)
&etween whom? $A%&A'% and 1ustomer
+hy this Areement (Purpose/$eason)?
2o et customer9s promise that he/she will lease from $A%&A'%! once the
identified property is purchased from the >eveloper.
2
Standard Sale
. #urchase
,greement
'(an- .
*e+eloper)
Standard Sale
. #urchase
,greement
'(an- .
*e+eloper)
&etween whom? $A%&A'% and >eveloper
+hy this Areement (Purpose/$eason)?
2o purchase property from the >eveloper by $A%&A'%! who in turn leases to
potential customers financed by $A%&A'%.
3
IJARAH WA IQTINA’A IJARAH HOME FINANCE!DOCUMENTATION AND PROCESS FLOW
8/13/2019 A Ijara Home Finance
http://slidepdf.com/reader/full/a-ijara-home-finance 10/13
&etween whom? 1ustomer! $A%&A'% and >eveloper
+hy this Areement (Purpose/$eason)?A supplemental sale/purchase areement (5PA) between >eveloper * 1ustomer!
where the customer is released and dischared from the 5PA and $A%&A'%
become a party to the 5PA in place of the customer upon the terms setout in this
2ripartite Areement.
Tripartite
,greement
'&ustomer
(an- .
*e+eloper
Tripartite
,greement
'&ustomer
(an- .
*e+eloper
4
Lease
,greement
'L,)
Lease
,greement
'L,)
&etween whom? $A%&A'% and 1ustomer
+hy this Areement (Purpose/$eason)?
$A%&A'% as the Lessor wishes to lease to the 1ustomer the property and the
Lessee wishes to ta#e the property on lease.
5
Ser+ice
,genc!
,greement
Ser+ice
,genc!
,greement
&etween whom? $A%&A'% and the 5ervice Provider
(enerally the lessee acts in this capacity under a separate areement)
+hy this Areement (Purpose/$eason)?
2his areement sets out the obliations of the service provider in relation to the
property. In most cases the lessee will be the service provider too who will fulfill
the terms and condition under this areement.
6
IJARAH WA IQTINA’A IJARAH HOME FINANCE!DOCUMENTATION AND PROCESS FLOW
8/13/2019 A Ijara Home Finance
http://slidepdf.com/reader/full/a-ijara-home-finance 11/13
&etween whom? $A%&A'% and the 1ustomer+hy this Areement (Purpose/$eason)?
Pursuant to the lease areement between $A%&A'% and the 1ustomer! the
purchase underta#in by the customer in favour of $A%&A'% is spelled out in
this areement
#urchase
/nderta-ing
'#/)
#urchase
/nderta-ing
'#/)
8
9
&etween whom? $A%&A'% and 1ustomer
+hy this Areement (Purpose/$eason)?
2his areement is e;ecuted in case the customer wants to purchase the property
prior to completion of the lease.
#urchase
,greement
'(an- .
&ustomer)
#urchase
,greement
'(an- .
&ustomer)
&etween whom? $A%&A'% and the 1ustomer
+hy this Areement (Purpose/$eason)?Pursuant to the lease areement between $A%&A'% and the 1ustomer! were
$A%&A'% is underta#in to sell the property at any time customer wants to
terminate the I8arah 1ontract.
Sale
/nderta-ing
'S/)
7
IJARAH WA IQTINA’A IJARAH HOME FINANCE!DOCUMENTATION AND PROCESS FLOW
8/13/2019 A Ijara Home Finance
http://slidepdf.com/reader/full/a-ijara-home-finance 12/13
0ame of the *ocuments
Signatories
(an- &ustomer *e+eloper1Seller
I8arah Application ; ;
1ustomer Promise to $ent ; ;
I8arah Bome Finance 1ontract ;
5ervice Aency Areement ;
2ripartite Areement C ; ;
5PA ;
Purchase nderta#in C C
5ale nderta#in C C
IJARAH WA IQTINA’A IJARAH HOME FINANCE!DOCUMENTATION AND PROCESS FLOW
T2#3 4F FI0,0&3 #54*/&T: I6,5,H H4M3 FI0,0&3
&40*ITI40: 04 *4W0 #,2M30T
8/13/2019 A Ijara Home Finance
http://slidepdf.com/reader/full/a-ijara-home-finance 13/13
0ame of the *ocumentsSignatories
(an- &ustomer *e+eloper1Seller
I8arah Application ; C
1ustomer Promise to $ent ; C
I8arah Bome Finance 1ontract ;
5ervice Aency Areement ;
2ripartite Areement
5PA ;
Purchase nderta#in ; C
5ale nderta#in C C
IJARAH WA IQTINA’A IJARAH HOME FINANCE!DOCUMENTATION AND PROCESS FLOW
T2#3 4F FI0,0&3 #54*/&T: I6,5,H H4M3 FI0,0&3
&40*ITI40: WITH *4W0 #,2M30T