Ijarah Islamic Banking

For many businesses and organisations, asset acquisition represents an important and major commitment. As an alternative to outright purchase, leasing provides businesses with the opportunity to access and use property or assets which remain the property of an outside party. Usage and ownership are separated for the mutual benefit of all parties involved in the agreement. In Islamic finance, Ijarah is a highly-popular and extremely versatile asset financing structure, which is fully Shariah-compliant and open to organisations at all levels. In a nutshell, Ijarah is the Islamic financial industry’s alternative to traditional western leasing activities and services.

Explore the key differences between western leasing and Ijarah with this insightful tutorial. Study an extensive range of key concepts and sub-topics, including essentials of Ijarah contracts, Ijarah and bai‘ compared, general juristic rules of Ijarah, execution of an Ijarah contract, determination of rent, sub-lease by the lessee, security/guarantee in Ijarah, liabilities of the parties, termination/amendment of the contract and implications, failure in payment of due rent, modern use of Ijarah, financial lease or hire–purchase, security or financing lease, operating lease, appraisal of conventional leases from the shar ıah angle, combining two contracts, takaful/insurance expenses, procedure for Ijarah Muntahia-bi-tamleek, sale and lease-back arrangement, destruction/theft of the asset, issues concerning modern use of Ijarah and more.