BAI BITHAMAN AJIL

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 BAI BITHAMAN AJIL

Bai-Bithaman Ajil (BBA) is known as Deferred

Instalment Sale.

A contract of “buying and selling” of an asset between a

bank and a customer. It is a mark-up sale of asset on
deferred payment, which includes cost of asset and an
agreed mark-up included in the selling price.

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 SALIENT FEATURES OF BBA

 Final Price should be contractually agreed and known

to both parties
 Payment of price is deferred

 Time and mode of payment should be ascertained

 No need to state the cost price & amt of mark-up

 Long-term financing

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 FEATURES OF BBA
 Bank’s Selling Price

The Bank’s selling price is the maximum amount payable at the end
of the financing tenure. The computation of the Bank’s selling price
is based on the contracted profit rate and the Bank’s purchase price
at a specified tenure, on monthly rest.

 Bank’s Purchase Price

The Bank’s purchase price is the total financing amount granted to

customer on the particular asset.

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 BBA Flow of Financing

(3)

BANK CUSTOMER

(4)

(2) (1)

DEVELOPER /
SELLER

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 BBA Flow of Financing
(1) Customer identifies asset to be purchased

(2) Bank purchases asset. Property Purchase Agreement executed based on

loan amount extended. Ad valorem stamp duty is payable

(3) Bank sells asset to customer at loan amount plus profit. Property Sale
Agreement executed

(4) Customer repays the bank through deferred installment throughout the
loan tenure

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 Grace Period
• A period where the Bank release the financing amount
progressively according to Sale and Purchase
Agreement during construction period.

• Upon completion of the house, instalment shall

commence.

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 COMPARISON BETWEEN CONVENTIONAL LOAN &
BBA FINANCING
PRODUCT BBA FINANCING CONVENTIONAL

Concept Based on buying and Based on loan

selling

Relationship Bank: Seller Bank: Lender

Customer : Buyer Customer : Borrower

Rate Fixed rate for the Installment paid based

financing tenor on interest (BLR+spread).
Installment change when
BLR changes

Shariah Need to comply with Not required

Compliance Shariah