City Manarah Auto Finance is a terminating financing facility (EMI based) based on Hire purchase under Sirkatul Mielk (HPSM) of Ijarah mode. HPSM is a combination of three contracts i.e Ijarah, Sirkat & Buy. HPSM is a special type of contract where both the bank and the customer supply equity in equal or unequal proportion for purchasing an asset, own the same jointly. The share in the asset owned by the bank is hired out to the customer and eventually the bank sells and transfers his ownership to the customer against full payment of price as per agreement. As the customer pays monthly installment ownership of the bank decreases and that of the customer increases. Monthly installment includes both rental and principal to buy back bank's ownership gradually over the financing period. |
