11:41
USD 89.47
EUR 96.56
RUB 0.97

National Bank proposes to develop mortgage on Islamic principles of financing

The National Bank of Kyrgyzstan proposes to develop mortgage based on the Islamic principles of financing when introducing «diminishing musharakah» contract in the banks. The draft resolution has been submitted for public discussion.

The project is aimed at expansion of Islamic financial products and is developed in accordance with international standards of Shariah.

As noted, the National Bank stands for the development of the Islamic financing principles sector.

The document applies to banks operating on the Islamic principles of financing, and aims «to create conditions and opportunities for the users of Islamic financial services for the purchase of real estate».

The National Bank proposes to provide the possibility for a financial-credit organization and a client to conclude the contract «diminishing musharakah», the subject of which is immovable property, jointly acquired by the parties to the contract.

In this case, the client gradually redeems the bank’s share in the immovable property with the payment of lease payments, which may be set separately or be included in the cost of the redeemed share.

The real estate under this contract may be insured. The insurance risk is divided between the partners, according to the shares held by the partners at a certain point in time.

The client can conclude a real estate lease agreement with a third party with the consent of the bank.

Popular