Industrial Hire Purchase-i
An asset financing facility for equipment, machineries or goods vehicles (where the maximum permissible laden weight exceeds 2,540 kilograms) for business use and purposes permissible under Shariah.
It is based on the Shariah concept of Al-Ijarah Thumma Al-Bai, which means hire or lease ending with ownership transfer. The bank purchases the asset required and hires it to the customer for a fixed period as agreed by both parties.
During the lease period, the customer pays rentals to the bank. The rental payment comprises cost to the bank for the purchase of the asset plus the bank's profit margin.
The ownership of the asset remains with the bank and the assets becomes a security for the facility. Upon expiry of the rental period, ownership of the equipment will be transferred to customer.