Professional Documents
Culture Documents
HASSAN KAMRAN
1
Diminishing Musharkah
Based on Shirkat-ul-Milk
Three components
1. Joint ownership of the bank & customer
2. Customer as lessee uses share of the bank
3. Redemption of the shareof the bank by the customer
An Illustration
1,000,000
400,000 40%
600,000 60%
10,000
8.50%
5
60
5
Rent
Unit Price
Monthly Payment
Balance Units
600000
60
4250
10000
14250
590000
59
4179
10000
14179
580000
58
4108
10000
14108
570000
57
4038
10000
14038
560000
56
3967
10000
13967
550000
55
56
354
10000
10354
40000
57
283
10000
10283
30000
58
213
10000
10213
20000
59
142
10000
10142
10000
60
71
10000
10071
129625
600000
729625
Key FAQ
What is the difference between the profit
Islamic Bank charges and the interest
charged in conventional mortgages?
In conventional mortgages the interest
charged is a mark-up on the money lent. The
profit charged by Islamic Bank is the
utilization payment for the consumers use of
our share throughout the life of the contract.
The profit is predetermined based on market
trends.
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10