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HBL Ijarah

Ijarah (Islamic Leasing) is the second most common financing instrument used by Islamic banks all over the world. HBL IB is currently offering Plant, Machinery and vehicle financing on the basis of Ijarah. HBL IB is the owner of this manual and the product implementation responsibility lies with product implementation unit.


  • Ijarah is a contract whereby the owner of any asset transfers its usufruct to another person for an agreed period, at an agreed consideration.
  • The period of lease must be determined in clear terms.
  • The lessee shall be liable to compensate the lessor for any damage to the leased asset caused by misuse or negligence on the part of the lessee.
  • The rental must be determined at the time of contract for the whole period of lease.
  • The lessor cannot increase the rent unilaterally and any agreement to this effect shall be void. However, as per agreed pricing mentioned in the agreement, Lessor can revise the rentals.
  • Sale Agreement should be unconditional to the future lease and without any reference to it.
  • Ijarah agreement should be signed after the execution of sale Agreement.