This query is related to transfer of ownership to the bank before the bank finances a fleet of cars for its customer (a car dealer) under a Murabahah contract
Fatawa Question
This query is related to transfer of ownership to the bank before the bank finances a fleet of cars for its customer (a car dealer) under a Murabahah contract. The question is whether the formal registration of cars purchased by the bank from the manufacturer is mandatory in the bank’s name before the bank sells the cars to the dealer on Murabahah basis ? As per market practice, the cars are registered only in the name of the end buyer when they purchase the cars from the dealer in cash or get them financed through conventional or Islamic banks. Since conventional banks do not need to purchase the cars in their name in order to finance their customers as they simply lend money to the customer to buy cars from dealers, the registration issue is not relevant for them. However, since Islamic banks cannot sell anything which they do not first own, guidance is needed for avoiding the requirement of the registration of cars in the name of the Islamic bank to confirm ownership, since this will result in extra cost and effort, making Islamic car financing a more expensive affair for the dealers ; who may pass on such extra costs to the end buyers.
Fatwa
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Publisher
Publication Date
2013-04-24
Country of Publication
Malaysia
Main Subjects
Economics & Business Administration
Islamic Studies
Data Type
Fatawa
Language
English
Record ID
BIM-784623
American Psychological Association (APA)
Hassan, Husayn Hamid. 2013-04-24. This query is related to transfer of ownership to the bank before the bank finances a fleet of cars for its customer (a car dealer) under a Murabahah contract. . Kuala Lumpur Malaysia : Islamic Finance News.
https://search.emarefa.net/detail/BIM-784623
Modern Language Association (MLA)
Hassan, Husayn Hamid. This query is related to transfer of ownership to the bank before the bank finances a fleet of cars for its customer (a car dealer) under a Murabahah contract. Kuala Lumpur Malaysia : Islamic Finance News. 2013-04-24.
https://search.emarefa.net/detail/BIM-784623
American Medical Association (AMA)
Hassan, Husayn Hamid. 2013-04-24. This query is related to transfer of ownership to the bank before the bank finances a fleet of cars for its customer (a car dealer) under a Murabahah contract. Kuala Lumpur Malaysia : Islamic Finance News.
https://search.emarefa.net/detail/BIM-784623