Al-Bai’ Bithaman Ajil (Credit Sale or Deferred Payment Sale Without Interest)

UAE Laws and Islamic Finance



Al-Bai’ Bithaman Ajil  

This concept refers to the sale of goods on a deferred payment basis at a price, which includes a profit margin agreed upon by both parties.  The profit is not an interest payment, however, it is part of the sale price.    (Wikipedia)

Al-Bai’ Bithaman Ajil  may consist of an agreement whereby a bank buys an asset and sells the asset to a third party customer at an agreed defined price, which the customer is obliged to pay on a deferred basis such as by periodic installments over a defined period of time.  This appears to be the same as a sale and purchase agreement in conventional finance whereby the vendor permits the purchaser to pay the sale price by installments, however, in the Islamic concept, the sale must satisfy the relevant Sharia’h requirements.

In sum, Al-Bai’ Bithaman Ajil is a Sharia’h complaint sale-…

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