Ijarah Muntahia Bittamleek. 1 definition. Ijarah Muntahia Bittamleek. as defined in Bahrain Monetary Agency Rulebook, Islamic Banks: Glossary of Defined. Lease (‘ijarah) contracts that end up with transfer of ownership of leased assets to the lessee. It can take one of the following forms: (i) A contract tha. Shari’ah Standard No. (9): Ijarah and Ijarah Muntahia Bittamleek Statement of the Standard 1. Scope of the Standard This standard covers operating leases.

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“Ijarah and Ijarah muntahia bittamleek” carried out by Islamic Banks: definition & accounting

An Ijarah may be renewed for another term, and such renewal bittamleel be made before the expiry of the original term or automatically by adding a provision in the new contract for such renewal when the new term starts, unless either party serves a notice on the other of its desire not to renew the contract. Thus, if the customer, in case of Ijarah associated with a promise to transfer ownership, breaches his promise, the promisor shall be charged either the difference between the cost of the asset intended to be leased and the total lease rentals for the asset which is leased on the basis of Ijarah Muntahia Bittamleek to a third party, or, in case of operating Ijarah, the promisor breaching his promise shall be charged the difference between the cost of acquisition and the total selling price if sold to a third party by the Institution promisee.

Any stipulated upfront rental or accelerated -because of delay bittalmeek payment- rental is subject to settlement at the end of the Ijarah period or, if the Ijarah contract is terminated earlier, at the time of such termination. Login Sign Up Toggle navigation.


By using this site, you agree to this use. However, if the asset is made available only after a period longer than what customary practices deem proper, then no payment shall be obligatory. Ijarah and Ijarah Muntahia Bittamleek also apply to bityamleek case of early ownership of the asset where a sale contract muntania concluded during the Ijarah.

In all these cases, the separate document evidencing a promise of gift, promise of sale or a promise of gift contingent on a particular event, should be independent of the contract of Ijarah Muntahia Bittamleek and cannot be taken as munntahia integral part of the contract of Ijarah.

However, it is preferable for the Institution to forgo any amount in excess of the actual damage it has suffered. Malaysia Economic Census – Environmental Compliance.

In such a case, it may not be stipulated that the rest of the instalments should be paid. Ijarah and Ijarah Muntahia Bittamleek have not yet iharah paid become a debt owed to the lessor by the lessee, and therefore cannot be increased. Central Bank of the United Arab Emirates: In this muntahix, an agreement is reached to make the described asset available during the duration of the contract, giving the lessor the opportunity to acquire or to produce it. For example, a house or a chattel may not be leased for the purpose of an impermissible act by the lessee, such as leasing premises to be used as headquarters by an Institution dealing in interest or to a shopkeeper for muntajia or storing prohibited goods, or leasing a vehicle to transport prohibited merchandise.


The lessee will not be held liable for any damage or destruction of the leased asset unless such damage or destruction ijsrah a result of misconduct or negligence on the part bittamldek the lessee. By IM Research 9 months ago. However, it is permissible to have a master agreement drawn up coveringa number of Ijarah transactions between the Institution and the customer, setting out the general terms and conditions of agreement between the two parties.

The Ijarah shall continue for the remaining time of the contract. This website uses cookies to improve services, analyse traffic to our site, deliver content and provide tailored ads.

Islamic Finance | Types of Ijarah Muntahia Bittamleek

In this case, there may either be a separate lease contract for each mntahia, in a specific written document signed by the two parties, or alternatively the two parties may exchange notices of offer and acceptance by referring to the terms and conditions contained in the master agreement.

Scope of ijara Standard This standard covers operating leases of properties or Ijarah Bittamleek Bittamleek, whether the Institution is the lessor or the lessee. The period of Ijarah should commence on the date of execution of the contract, unless the two parties agree on a specified future commencement date, resulting in a future Ijarah, that is, an Ijarah contract to be executed at a future date.

Ijarah and Ijarah Muntahia Bittamleek of rental for previous periods, and not all rental instalments, including instalments which have not yet fallen due and in respect of periods for which the lessee has not had the benefit of the leased asset. Both he and the lessor may also agree to amend the rental in case of partial destruction of the leased property, if the lessee waives his right to termination.

Termination is also possible when one party secures an option to terminate the contract in which case the party who holds the option may exercise it during the specified period. Weekly Selected Indicators – 26 October. Monetary and Banking Developments – September Sign in to continue reading Ijarah and Ijarah Muntahia Bittamleek b A promise to give it as a gift for no consideration.

It is not a requirement of this lease that the rental should be paid in advance as long as the lease is not executed according to the contract of Salam or Salaf.

However, it is for a customer to request an Institution to acquire the asset or to acquire the usufruct of an existing asset which the customer wishes to take on lease. The lessor may take out permissible insurance on it whenever possible, and such insurance expenses must be borne by the lessor.


Ijarah and Ijarah Muntahia Bittamleek between the date specified in the contract iiarah the date of actual delivery, and the rental should be reduced accordingly, unless it is agreed that the lease be extended by an equivalent period after its original expiry date.

Ijarah and Ijarah Muntahia Bittamleek – Scope of Standard –

The lessor in this case is not entitled to rent for the period during which the lessee was not able to benefit from the asset unless the lessor makes it up by agreement with the lessee with a like benefit after the expiry of the period specified in the contract.

In this case, each lessee may benefit from the property during the time assigned to him in accordance with specified rules. It may also be for a fixed or variable amount, according to whatever designated method the two parties agree upon. However, the heirs of the lessee may terminate the Ijarah contract if they can prove that the contract has become, as a result of the death of their legator, too onerous for their resources and in excess of their needs.


Ijarah and Ijarah Muntahia Bittamleek damage to the leased asset by misuse through misconduct or negligence. None of these rules should be breached under the pretext that the leased asset was bought by the lessor on the basis of a promise by the lessee that he would acquire it or that ownership of it would devolve upon him, or that he would pay rentals in excess of those payable in respect of a similar property which are similar in amount to the instalments of an instalment sale, or that local laws and conventional banking practices consider such a transaction as an instalment sale with a deferred transfer of the ownership.

The lessor may take this into account implicitly when the lease rental is to be fixed. It is then permissible that bitgamleek rentals for subsequent periods be determined according to a certain benchmark. However, a binding promise is binding on one party only, while the other party must have the option not to proceed. This period must be long enough so that the leased property or its value could have changed.

Although this type of agency for the purchase of the assets is permissible, it is always preferred that the agent is someone other than the customer prospective lessee as far as possible. The excess of the second part of the rental shall be treated as an advance to the lessor on account, while the lessor shall bear any shortage.