Professional Documents
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Who Am I Kidding
Who Am I Kidding
Who Am I Kidding
Concept:
3.
4.
5.
Hibah
2nd: signed by the customer & the coowner (A) get back his share after the
sale & purchase of property.
the signing can only be done after
signing PSA and PPA - but before
signing of security documents so that
the original two owners can charge or
assign the property to bank as as
security.
Advantages:
BBA
Conventional
establish a seller/
buyer r/s between
parties
creates a creditor/
debtor r/s between
bank & its customer.
x interest
has interest
interest risk - no
capping .
Stamp duty
the amount shown in the security
documents reflects the selling price of the
bank to the borrower, thus if the stamp
duty are calculated based on the selling
price , customer will be burdened with
excessive stamp duty on charge.
Therefore, Stamp Act 1949 was amended
- Act A723 of 1989:
S 14; duty chargeable for repayment of
money under islamic banking shall be
calculated on the principal loan amount
applied by the borrower. ( stamp duty
calculated based on purchase price not
selling price).
PPA are also exempted from stamp duty
under Stamp Duty ( Exemption) Order
1987 .
Therefore, only PSA need to be stamped Rm10 je.
The issues under BBA
1. sale of non-existent property:
BBA facility may be applied for property
under construction as well as
completed property.
2. Transfer of Ownership
Execution of PPA & PSA in the facility
should reflect the transfer of ownership.
Dato Hj Nik Mahmud b Daud v Bank
Islam - The execution of PPA & PSA
does not amount to any transfer of
ownership.
3. Premature termination of BBA contract
when there is early settlement of the
facility, islamic bank can grant a rebate to
waive their right to the unaccrue sum but
such discounts are discretionary.
if rebate not given - syariah financing
contract cost more than conventional
loan.
BIMB v Azhar Osman : i purchaser back
out from the loan, the bank can only claim
the amount due and not on total selling
price.