FNB Wesbank Islamic Vehicle Financing Model: Shariah Compliant?

FNB Wesbank Islamic Vehicle Financing Model: Shariah Compliant?


Please let me know if the FNB wesbank vehicle financing agreement is Shariah compliant?


In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

A rental agreement is referred to as “Ijarah” in Shariah and hence all the rules and laws of Ijarah will be applicable. There are different forms of Ijarah including Ijarah al-A’maal, Mushtarakah and Ijarah al’Manafie. There are several parties in an Ijarah including the Mujeer/Lessor, Musta’jir/lessee and the Ujrah/rental fee. There are a number of considerations in reviewing a Shariah Compliant financial solution including a thorough review of the underlying financial mechanism/construct, the terms and conditions and the supervision and monitoring of the agreement to ensure continual shariah compliance. 

We have structured the FNB Wesbank vehicle Ijarah lease agreement under the guidance of Hazrat Mufti Ebrahim Desai Saheb RA. We have also structured a number of other shariah compliant solutions under his esteemed guidance. We understand that the FNB Wesbank Islamic vehicle finance lease agreement is based on an Ijarah agreement with a separate option to purchase agreement. The purchaser also signs acknowledgment of freedom of choice agreement. In general and in principle, the FNB Wesbank Ijarah vehicle finance agreement is permissible and Shariah compliant. However we advise for all the different agreements and legs of the transaction be segmented and separated such that they are independently signed on different days. 

You are welcome to contact us at the Darul Iftaa for further guidance on structuring a shariah compliant agreement. You can read more on Ijarah by downloading our book “Your Brief Guide to Islamic Finance” from www.shariahbusiness.com.

and Allah Ta'ala Knows Best

(Mufti) Ismail Desai
Chairman of Shariah Board and Fatwa Committee
Darul Iftaa, Durban, South Africa

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