AUTO CAR IJARAH

PRSENTED BY: ADNAN GHAFOOR

IJARAH
Leasing in Islamic banking Basic principle:
Transfer of use not Ownership Mutually Agreed Term & Condition Renal Based Agreement

Product features
Fully shariah complaint product Lowest profit rates No advance rentals No straight insurance charges No straight registration charges Payable in 24 to 60 rentals Financing of new, used as well as imported vehicles

Asset Under Ijarah

Must have a valuable use Identified and Quantified Consumable thing cannot be leased out
E.g. money eatables, fuel, etc.

Target market
Target market is divided into two groups: Salaried individuals Self employed and business persons

Eligibility criteria salaried individuals

Must be working/in employment for at least 2 years Employed with the current employer for a min of 6 months Minimum income of Rs 40,000 Remaining service life must be more than or equal to the tenure applied for Age 22 to 62 years(maturity)

SEP/BUSINESS PERSONS
Must be in business for at least 3 years Age 22 to 65 years(maturity) Minimum income of Rs 50,000 Nature of business should not be against shariah guidelines.

Documentation (salaried individuals)

Copy of CNIC Employment certificate/last three salary slips attested by HR Six month bank statement where salary is credited Copy of latest utility bills paid recently Two recent passport size photographs Signature verified from bank Form 29 in case of salaried directors

Business individuals
Copy of CNIC NTN certificate Letter of proprietorship/ last three years tax returns with receipts Last Six month bank statement Copy of latest utility bills paid recently Two recent passport size photographs NOC from partners Signature verified from bank CNICS of partners Form 29 in case of directors

Promissory Note & Down Payment

No promissory note Down payment
From 15% to 70% Bank will back to customer

Ownership
Ownership remain in the name of the bank Until all of the rentals are paid by customer

Rentals
Variable 1 years KIBOR + between 3.5% to 4.5% Al-baraka take yearly rates given by KIBOR 12 checks at the time of contract Customer must insure the amount in account

Plenty
Plenty is charged to customer who delay the payment of rental Two type of plenty: Delayed payment
Go to charity account 5% of the rental Board maintain the account

Cheque return
Income of the bank Rs. 500 for every cheque bounce

Sale deed & Takaful

At maturity Mid of lease
After 1 year

Takaful
Done by the bank In the initial stage

Risks
No risk Except for
Accident Theft