IMBT is a lease contract which ends with the transfer of ownership of the leased asset/property to the lessee on maturity of the leasing period. This financing is based on the Shariah contract of Ijarah Muntahia Bi al-Tamlik (leasing ending with ownership).

Concept

Ijarah Term Financing-i is based on the Shariah contract of Ijarah Muntahia Bi al-Tamlik (leasing ending with ownership). Under this contract, the customer will sell the beneficial interest of the assets/properties to the Bank and the Bank will pay the customer the purchase price which is equivalent to the financing amount. The Bank will then lease the Ijarah assets/properties to customer at an agreed rental amount for a specific tenure. Upon expiry of the leasing period the Bank will sell the assets to the customer at a price agreed by both parties.

Purpose

To finance the purchase of leasable and completed property/asset such as building, vessel, plane or land and to re-finance the above properties/assets.

Underlying Assets

Leasable and Completed Assets (to be purchased or owned by customer) such as landed property, building, vessel, commercial vehicles, etc.

Profit Rate / Pricing

The pricing is as per the existing pricing for Islamic Term financing of which can be offered under:

• Fixed rate (Profit Code: 19 - Profit);
  As per the Islamic term financing rate. The rate will remain fixed throughout the financing tenure. The rate will be determined based on tenure, Cagamas Standard Rate, Borrower Risk Rating amortizing type of the fixed rate financing.
• Floating rate (Profit Code : 34 - IBBLR);
  Base Financing Rate + margin/spread (at par with the conventional rate i.e. the spread may range from 0.25% to 2.5%.
• A combination of fixed rate and floating rate.

Note: There is no Selling Price element for Ijarah Term Financing-i. Thus the Selling Price Rate is not applicable.

Mode of Rental Payment

1. Bullet or lump-sum payment.
2. Periodically, i.e. monthly, quarterly, half-yearly and yearly.

Processing/Facility/Upfront Fee

Allowable to be charged only on approved financing for commercial and industrial properties i.e. factories, plants or housing. To be agreed between the Bank and customer.

Costs and Expenses

Customer is responsible for all costs and expenses related to the maintenance of the Ijarah Asset.

Takaful Coverage

Customer is responsible for cost of Takaful against fire/burglary on:-

• the asset/property leased from the Bank
• the asset/property charged/assigned/pledged to the Bank.

Other terms and Conditions

Other terms and conditions such as compensation fee (ta’widh), cross-default and margin of financing are as per the existing term financing under BBA, Musharakah Mutanaqisah and Murabahah.

Who Can Apply

Eligible individual or non-individual customers, local and foreign.

For this excellent financing facility, visit your nearest Commercial Business Centre or Trade Finance Centre or Corporate Investment Banking for further information.