Bike Ijarah is Pakistan’s first Riba-free motorcycle financing facility which is based on the Islamic financing mode of Ijarah (leasing). It is ideal for individuals who want to get interest-free financing for acquiring a motorcycle.
Bike Ijarah works through a bike rental agreement, under which the Bank purchases the vehicle and rents it out to the customer for a period of 1 to 3 years, agreed at the time of the contract. Upon completion of the Ijarah period, the vehicle will be sold at a token amount or gifted to the customer.
Bike Ijarah, designed under the supervision of Meezan Bank’s Shariah experts, is unique to bike leasing facilities provided by other banks.
Rights & Liabilities of Owner v/s User
An Islamic Ijarah is an asset-based contract, i.e. the Lessor should have ownership of the asset during the period of the contract. Under Islamic Shariah, all ownership related rights and liabilities should lie with the owner while all usage-related rights and liabilities should lie with the user. A conventional lease contract does not distinguish between the natures of these liabilities and places all liabilities on the user of the asset, which is contradictory to Islamic Shariah.
Under Ijarah, all ownership-related risks lie with the Bank while all usage related risks lie with the user, thus making the Lessor the true owner of the asset and making the income generated through the contract permissible (Halal) for the Bank.
Continuation of lease rentals in case of total loss or theft of vehicle
If the leased vehicle is stolen or completely destroyed, the conventional leasing company continues charging the lease rent till the settlement of the Insurance claim. Under the Islamic system, rent is consideration for usage of the leased asset, and if the asset has been stolen or destroyed, the concept of rental becomes void. As such, in the above-mentioned eventualities, Meezan Bank does not charge the lease rental.
Takaful instead of Insurance
Legally (in accordance to Pakistan’s Law and Regulations), it is required for all leasing entities to insure the leased assets. Meezan Bank insured its assets through Takaful only, which is the Islamic product for insurance.
Permissibility for Penalty of Late Payment of Rent under Islamic Shariah
In most contemporary financial leases, an extra monetary amount is charged, in their income, if the rent is not paid on time. This extra amount is the considered as Riba and is Haram. Under Ijarah, the Lessee may be asked to undertake, that if he fails to pay rent on its due date, he will pay certain amount to a charity, which will be administered through the Islamic Bank. For this purpose, the Bank maintains a charity fund where such amounts may be credited and disbursed for charitable purpose.
How to get a bike through Bike Ijarah?
To apply for Meezan Bank’s Bike Ijarah, fill out a customer application form (available at all branches), attach the required documents and get your financing approved in a 5-7 working days.
Pakistani, Adult, Permanent resident
20 - 65 years old (Businessmen & SEP) at maturity
20 - 60 years old (Salaried) at maturity
Salaried Class - 25,000/- (Gross Salary)
SEP - 40,000/-
Businessmen - 40,000/-
35% of net monthly income /- (For Salaried, SEP and Businessmen)
Minimum 15% of cost of the vehicle and Maximum 50% of cost of the vehicle
1,2 and 3 years
Through post dated cheques
Direct debit instructions of Meezan Bank account
Direct deduction from salary by employer (only in corporate cases)
Cheque return charges would be levied as per the Bank’s schedule of Charges
As per Takaful company’s policy
Fill out a customer application form (available at any Branch)
Attach the required documents and submit your application with Rs. 750 (Non-refundable processing fee)
Get your financing approved in a 5-7 working days
Helpful Downloads: Bike Ijarah Form
Fill out the form below and you will be contacted by a Meezan Bank representative.
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