Bai Bithaman Ajil (BBA)

Bai Bithaman Ajil (BBA)
Bai Bithaman Ajil means deferred payment sale. It is a sale based Islamic financing, usually used for financing house purchases by costumers. Technically, this financing facility is based on the activities of trade. “The property that you wish to purchase for example, are bought by the bank and sold to you at an agreed to price, once the bank and you determine the tenure and the manner of the instalments. The price at which the bank sells you the property will include the actual cost of the property, and will also incorporate the bank's profit margin.” As this is an Islamic way of financing, therefore there is no interest charged and any extra charges as compensations for the bank in all cases. The selling price in BBA is fixed which means no adjustment will be made if interest rates fluctuate.