Question :
What is the ruling of Sharia on the closed-end lease of the Arab Islamic Bank according to the last version amended in cooperation with the General Iftaa` Department?
The Answer :
All perfect praise be to Allah the Lord of the Worlds. May His peace and blessings be upon Prophet Mohammad and upon all his family and companions.
We would like to make clear that we were keen on arriving at a Sharia-compliant version for the closed-end lease of the Arab Islamic Bank through observing the different views of the reliable schools of thought and observing the stipulations of Sharia in this regard.
After careful examination, consultations and reviewing related literature, we pray that the amended version of the closed-end lease of the Arab Islamic Bank-
see attached copy-is free of any violations of Sharia that could cause it to become invalid. Thus, this contract is valid and permissible to deal in, however, it is necessary to pay attention to the following two important points:
First: The Bank must adhere to the terms of contract and make sure of their application in compliance with Sharia. The most important of these is that the closed-end lease is renewed annually with express consent of the lessee and isn`t concluded save after the Bank actually purchases the property in question. Rather, the Bank must start by making the lessee sign a promise to complete the transaction, then the original contract (Close-end lease). And Allah Knows Best.
