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Friday, 3 April 2009

Bank Islam: Bai Bithaman Ajil (BBA) Contracts Valid

KUALA LUMPUR, April 1 (Bernama) -- Customers of Bank Islam Malaysia Bhd and the public at large can now take comfort from knowing that Bai Bithaman Ajil (BBA) contracts are valid and binding.

This followed the unanimous decision by judges of the Court of Appeal yesterday during a proceeding involving Bank Islam.

The decision reaffirmed the bank's practices in relation to BBA contracts are Syariah-compliant and valid, Bank Islam said in a statement today.

According to the bank, the Court of Appeal also reiterated that a BBA contract is a sale transaction and therefore must not be compared to a loan transaction.

The BBA contract means a "deferred payment sale". It is a mode of Islamic financing used for properties and vehicles as well as financing of other consumer goods.

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Alfalah Consulting - KL: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com
Islamic finance & mgmt consultant: www.ahmad-sanusi-husain.com

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