The customer was provided with an Ijarah facility by the Islamic bank on financial lease basis with bullet payment at the end of the lease term

Fatawa Question

The customer was provided with an Ijarah facility by the Islamic bank on financial lease basis with bullet payment at the end of the lease term. The lease term is coming to an end and the customer is unable to make the bullet payment due to financial problems. This makes the exercise of the put option provided by the customer not viable since the customer will not be able to purchase the property and settle the outstanding Ijarah amount. Based on its expertise in the real estate market, the customer has requested the bank to allow it to sell the property at best possible market price. The bank is willing to consider this option but would like to ensure that it should get a price which is adequate to settle the customer’s outstanding Ijarah facility in its books. What could be the Shariah compliant way to achieve this objective ?

Fatwa

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Publisher

Islamic Finance News

Publication Date

2013-05-29

Country of Publication

Malaysia

Main Subjects

Economics & Business Administration
Islamic Studies

Data Type

Fatawa

Language

English

Record ID

BIM-784618

• APA
• MLA
• AMA