DIMINISHING MUSHARAKAH:

Diminishing Musharakah is a form of 'Musharakah' in which the ownership of the asset is divided into
units. The bank then leases its share of asset (units) to the customer against rental payments. In parallel,
the customer periodically purchases the units under the ownership of the bank.

Diminishing Musharakah for carrying business of services:

Creating joint ownership in a taxi in the form of Shirkah al-Milk. As already stated this is
allowed in Shariah.
Musharakah in the income generated through the services of taxi.
Purchase of different units of the share of the financier by the client. This is again subject to the
conditions already detailed in the case of House financing.

DIMINISHING MUSHARAKAH IN TRADE

The arrangement is simply a musharakah whereby two partners invest different amounts of
capital in a joint enterprise
Purchase of different units of the share of the financier by the client. This may be in the form of a
separate and independent promise by the client. The requirements of Shariah regarding this
promise are the same as explained in the case of House financing with one very important
difference. Here the price of units of the financier cannot be fixed in the promise to purchase,
because if the price is fixed before hand at the time of entering into musharakah, it will
practically mean that the client has ensured the principal invested by the financier with or
without profit, which is strictly prohibited in the case of musharakah.

MURABAHA
Murabaha is a kind of sale where the seller expressively mentions the cost of the commodity
purchased and sells it to another person by adding some profit thereon. The distinguishing
feature of MURABAHA from ordinary sale is:
• The seller discloses the cost to the buyer.
• And a known profit is added

What is sale in Islamic Jurisprudence?

Sale (Bai) is commonly defined in shari’ah as “the exchange of a thing of value by another thing
of value with mutual consent”. More specifically it means “the sale of a commodity in exchange
of cash”
Sharia Rulling of BAI ( Sale)
You cannot sale the thing unless the following condition are met

1. Eixstence
Sale must ‘Exist’ at the time of Sale
Example: A sells the unborn calf of his cow to B. The sale is void.

2. Ownership
Seller must own the item at the time of Sale.
Example: A sells to B a car which is presently owned by C, but A is hopeful that he will buy it
from C and shall deliver it to B subsequently. The sale is void, because the car was not owned by
A at the time of sale.

3. Possession
Sale must be in Physical or Constructive Possession of the seller when he sells. “Constructive
possession” means a situation where the possessor has not taken the physical delivery of the
commodity, yet the commodity has come into his control
4. Instant and Absolute
Sale must be instant and absolute.
Examples: A says to B on the first of January: “I sell my car to you on the first of February”.
The sale is void, because it is attributed to a future date

5. Pinpointation / Specification
Sale must be specifically known and identified to the buyer.

6. Certainty of Price
The certainty of price is a necessary condition for the validity of a sale.

7. Certainty of delivery of subject matter

The delivery of the sold commodity to the buyer must be certain and should not depend on a
contingency or chance.
Example: A sells his car stolen by some anonymous person and the buyer purchases it under the
hope that he will manage to take it back. The sale is void.

8. . Halal goods
Sale should not be a thing which is not used except for a haram purpose, like wine etc.

9. Property of Value
Sale must be a property of value. A thing having no value according to the usage of trade cannot
be sold or purchased..

10. . Unconditional sale

Two contract is in one contract is not allowed according to the Shariat.
Example: A buys a refrigerator from B, with a condition that B undertakes its free service for 2
years. The condition, being recognized as a part of the transaction, is valid and the sale is lawful