Diminishing Musharakah:

Diminishing Musharakah ultimately culminates in the ownership of the asset / project by the client.The bank participates as a financial partner, in full or in part, in an asset/project with a given income forecast. The share of the bank is divided into ‘units of ownership’ and the client undertakes to periodically purchase the units representing the share of the bank, thus increasing his own share till all the units of the bank are purchased by him, so as to become the sole owner of the asset.

Features:

  • Joint ownership between the Bank and Customer
  • Financing of fixed assets, long term projects
  • House, plant ,machinery and factory financing
  • Conversion of conventional loan into Islamic financing is limited to the specified assets and not to the whole enterprise or business.