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Ijarah

A form of leasing contract in which there is a transfer of ownership of service (for use of an asset) for a specified period. Ijarah allows a financial institution to earn profits by charging rentals for the use of the asset. Under this scheme of financing an Islamic bank purchases an asset as per specification provided by the client. The period of lease and the lease rental fee are set in advance and may be determined by mutual agreement according to nature of the asset. During the period of the lease, the asset remains in ownership of the bank (as lessor), but the client (as lessee) has the right to use it.

Ijarah module features:

  • Handling three types of Ijarah:
  1. operational Ijarah
  2. Ijarah services
  3. End ownership Ijarah
  • Entering the data of the Ijarah details
  • Entering the promise to lease data
  • Can print the promise to lease record
  • Opening the Ijarah account
  • Ijarah set-up
  • Can print Ijarah contract
  • System automatically tracks the Ijarah installments
  • System automatically generates the Ijarah installments schedule
  • Can add different products of Ijarah and every product has its own GLs and policies
  • Can deduct the delay compensation in case of delaying in payment
  • Can open a reward account for early payment
  • Tracks arrears and its stages and the daily accrual of delay compensation with possibility of deducting it
  • In case of insufficient fund, the system can debit the first and the second guarantors’ accounts
  • Can block salary installment from the normal or investment current account
  • Automatic repayment from the normal or investment current account balance
  • The ability to postpone installments