Applications of Ijarah Muntahia Bittamleek Described in the Financial Disclosure of Islamic Banks in the United Arab Emirates: A Juristic Critical Study

Abstract

Islamic banks use several banking products to provide financing and credit facilities. These products include Ijarah Muntahia Bittamleek described in Al Dhimah (The lease contract ending with ownership described in the disclosure), which Islamic banks have used for long-term financing due to the possibility of installment changes as result of major economic fluctuations. This is definitely not the case in Murabaha contracts where the monthly installment may not be changed as it becomes a debt. This research is summarized in the statement of the concept of Ijarah Muntahia Bittamleek described in the disclosure terminology and the mechanism of its application in Islamic banks in the United Arab Emirates. This is added to case studies of Ijarah Muntahia Bittamleek described in the application of Sharjah Islamic Bank and its jurisprudential evaluation. The researcher adopted Shari'a standards issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and by the decisions of the jurisprudential councils in the evaluation of jurisprudence being accredited at the Central Bank of the UAE.