Islamic Policies

Ijara is a type of financial lease whereby BisB would acquire certain assets or equipment and then lease it to the customer for payment of rentals (fixed or floating) on monthly or half-yearly basis. At the end of the lease period, the ownership of the asset will be transferred to the customer upon payment of all dues.

Murabaha contracts allow customers to purchase raw materials, capital goods and other consumables from local and international markets. These goods are first bought by BisB for its account on orders of the customers by paying cash or through LC as the case may be and then sold to the customers with profit margin on deferred payment basis. Payment on deferred basis can be made to the bank in installments or in one lump sum amount.

This is a financing facility to provide cash to the customers. This is done by selling goods or commodities to the customers. Later, the customer appoints the bank as the agent to sell the same goods in the market on its behalf and the sale proceeds are transferred to the customer. Payment on deferred basis can be made to the bank in installments or in one lump sum amount.

Musharaka works like a limited partnership between BisB and customers who need to import certain goods and equipment but do not have sufficient funds. In this type of transaction, the customer would provide a portion of the funds and BisB would provide the remaining funds and issue LCs to import the goods. When the goods arrive, there are three options available:
a) BisB sells its share in Musharaka to the customer on cash payment or deferred basis at an agreed margin;
b) the customer sells its share to BisB on cash payment or deferred basis; and
c) both sell their shares in the market together.

This product is suitable for financing large projects. Under Istisna, BisB will arrange to build an asset or plant (the Project) in accordance with the specifications requested by the customer. Upon completion, the asset will be delivered to the customer against deferred payment of the sale price.

Tawaruq is a type of financing whereby the customer would receive a certain amount of cash from BisB through the execution of two instant murabahas in commodities. And the payments will be on monthly, quarterly or semi-annually basis. The customer has to pay the whole amount by the end of the period.