FBF20403

Financial Practices
PART 11
~ISLAMIC CREDIT
MANAGEMENT~

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 Prepared By
Group13
MUHAMMAD FAIQ BIN 066419
AMINUDDIN
AHMAD BAIHAQI BIN 066780
MOHAMAD
MUHAMAD ALI BIN
AQIL MUQRI 066864
KAMRO

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 What we'll
discuss
• General terms And
Conditions of a Loan
Approval
• Documentation of
Islamic Finance

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General terms And
Conditions of a
Loan Approval

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 General terms &
BORRO Conditions
FACILIT
AMOUN
T
WER Y
SECURI TENUR PURPOS
TY E E

PRICIN
REPAYM PREPAYM G 5
 Loan Documentation
Issuance of Stages
Appointment Drafting the facility
offer letter of solicitor and security
instrument

•Stamping, registering Conditions precedent •Finalizing and

and perfecting the compliance execution of the
instruments instruments

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Documentation of
Islamic Finance

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Islamic perspective of financing
documentation
• Documentation of contracts -highly
recommended
• Clear and understandable for the contracting
parties
• Reflect the contract as intended by the
contracting parties
• Comply with the Shariah principles that are applicable
to the respective contract

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Shariah rules for legal
documentation
• The agreement free from - usury (riba),
uncertainty (gharar),gambling (maisir), and
anything that is prohibited (haram) under the
Shariah.
• Common clauses in conventional legal
documentation may be acceptable, provided
that they do not contravene any Shariah
principles

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 Understanding the Nature of Islamic
Sale-based financing Lease-based
• Murabahah • Ijarah
• Istisna • ijarah thumma al-
• Salam bay’

Partnership-based Fee-based
• Musharakah
• Musharakah • Wakalah
mutanaqisah • Ujrah

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 Key Features for the documentation of
different Islamic Contracts
Sale-Based Lease- Partnership-Based
• Exchange contracts • Bases
Exchange of usufruct • Profit and Loss
(al-bay’) with rental payment sharing
• Exchange of subject (price) • Sharing of the
matter with price • Financial obligation to liability based on
(fixed) pay ratio of liability
• Financial obligation • Rental payment at • Financial
to pay specific date obligation to pay
• Installment payments throughout the rental & selling
at specific date financing period price
throughout the • Security of payment • Security of
financing period payment
• Security of payment
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 Summa
The fundamental guidelines of Shariah law,
which forbids the ry
payment or receipt of interest
(riba) and encourages moral and just financial
practises, serve as the foundation for the approval
and documentation of a loan in Islamic banking.
It's crucial to keep in mind that certain terms and
conditions may change based on the financial
institution and the type of loan. To fully
comprehend the terms and conditions connected
with a specific loan, it is important to carefully
analyse the loan agreement and speak with 1