Equipment/Machinery Ijarah Fiancing - Leasing ............... On a Straight Path

Ijarah wa Iqtina, the concept

Ijarah is an Islamic mode of leasing and can be used for assets that are not consumed while they are in use, for instance, it can be a house, car or any other tangible asset. During the tenure of Ijarah financing the asset given by the bank remains in DIBL's ownership and all risks are borne by the Bank. According to Shari'ah compliant Car Ijarah financing, FDIBL gives its car on rental basis to the customer against agreed payment and period. After the determined period of Ijarah, customer may purchase the car at an agreed price or may return it back to FDIBL.

Salient Features

• Free from Riba.

• Fully Shari'ah compliant.

• No up-front insurance payment.

• No up-front registration fees and related expenses.

• Minimum Tenor 3 years; Maximum Tenor 5 years.

• Payment period: Monthly/Quarterly/Semi-annually.

Nature of Equipment/Machinery

• Foreign manufactured and purchased through Letter of Credit

• Locally manufactured

DIMINISHING MUSHARAKAH FINANCING FOR PLANT / MACHINERY / EQUIPMENT / FACTORY BUILDING

Diminishing Musharakah is a Shirkah (partnership) based transaction through
which Dawood Islamic Bank Limited (“DIBL”) and its customer contribute their
equity at an agreed ratio for the purchase of equipment/machinery and other
tangible assets.

Diminishing Musharakah at a glance:
Request from the customer to DIBL for the purchase of specific equipment/machinery.

DIBL and the customer jointly contribute their share of equity at an agreed ratio to purchase the equipment/machinery by executing a Diminishing Musharakah Agreement.
DIBL's share is divided into monetary units subject to purchase by its customer periodically until such time that the sole ownership of equipment/machinery is transferred in the name of the customer.
Besides purchase of DIBL’s equity periodically, the customer utilizes the usufructs/benefits of the equipment/machinery and pays agreed consideration to DIBL, periodically.
As continuing security for the obligations of the customer, the following documents shall be executed between DIBL and the customer:

1. Diminishing Musharakah Agreement;
2 .Agreement for Periodical Payment (Monthly/Quarterly/Semi-Annually);
3 .Undertaking to Purchase the Musharakah Units;
4 .Authority letter to be executed by customer in favor of DIBL to make an offer by the client to sell the ownership in property subject to Sale & Purchase Back Diminishing Musharakah

The customer shall create a charge over the equipment/machinery in favor of DIBL.