Conference Program
Paper Title: An Exploratory study of Car Ijarah Practices in Islamic Banks of Pakistan
Islamic banking is the system where interest is prohibited, gambling is banned, “gharar” is forbidden, where everything is upheld by tangible assets, where investors have lower risk. All rules and regulations of the banking system are governed by Sharia Rules, providing collective impartiality and fairness, while gratifying the financial requirements of the community and maintaining high principles of moral values, simplicity and wisdom of accountability. The main objective of the study is to review the Vehicle Ijarah in the light of Sharia and legal maxim provided by the Islamic banks in Pakistan. The methodology used in this study is based on the questionnaires to be filled by the bank personals at managerial level and detail analysis of the documents of lease provided by the bank. There are five Islamic banks operating in Pakistan namely Meezan Bank, Burj Bank, Dubai Islamic Banks, Albarakah Bank and Bank Islami. This study finds that most of the conditions regarding lease agreement imply that Islamic banks in Pakistan practice Sharia laws like the commencement of lease start at the delivery of the vehicle, customers are liable to pay any loss due to his negligence and wear and tear whereas, the bank is liable to pay any loss due to natural disaster. The banks have an option to charge variable lease rentals in long term lease; however, the transfer of ownership after the completion of the lease terms is in the hands of bank etc., whereas expenses related to purchase are borne by lessee, most of the banks have no right to cancel the lease agreement any time if lessee has violated lease agreement and insurance expense (takaful) is borne by lessee are against Sharia law.




Dr Asfia Obaid
Conference Convener
Tel: 00-92-51-90853201

Mr Kashir Asghar
Conference Coordinator
Tel: 00-92-51-90853100