Istisna’a is a Sharia’a mode of financing widely used by Islamic banks and financial institutions to finance the construction of buildings, residential towers, villas and related products, and manufacturing of aircrafts, ships, machines and equipment, etc.
The Arabic word “Istisna’a” means “asking someone to manufacture”. It may be further defined and elaborated as a sale contract between the seller and the buyer for the sale of an asset described in the sale contract and transacted before it comes into existence. To fulfill its obligation, the seller can either manufacture/construct it by itself or can get it manufactured/constructed by someone else to deliver it to the buyer on the date described in the sale contract. The buyer can pay the sale price in lump sum at the time of signing the contract or later in different stages as the manufacturing/construction process proceeds.
We adopt Istisna’a mode of financing to fulfill your financing requirements in relation to properties, buildings, and villas, etc. Following is a brief outline of this mechanism. If you own, or have a usufruct of, a plot of land and want to construct a property on it and need financing for this purpose, we will sign an Istisna’a agreement with you to sell the property and then construct the building as per your specifications at our own cost and will get the sale price from you on a deferred payment basis.
Details of the terms under which this product is offered are outlined below:
Terms of Financing
Type of Property: Freehold.
Cash Contribution: Minimum 40% to 50% of total project cost.
Finance Tenor: 10 years including up to two years construction period.
Mode of Repayment: Monthly, Quarterly, Semi-annual or Annual terms are available
Sources of Repayment: Primary: Rental income of the project. Secondary: Other incomes.
Profit Rate: Fixed throughout the financing period.
Security: First degree registered mortgage on the plot and the building, in addition to the other terms of approval.
Insurance: Insurance policy covering the property under construction to be assigned to the Bank.
Qualified Assets: Residential, Office Buildings & Villa Complexes.
Documentary Requirements:
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Copy of valid passport.
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Full details of personal financial information supported with documents.
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Personal bank statements for the last six months.
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Completed finance application form.
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Copy of site plan.
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Copy of title deed.
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Comprehensive Feasibility Study prepared by reputed consultant.
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Project specification and approved drawings.
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Copies of the consultant / contractor agreements.
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Copy of approval of electricity connection date.
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Paying the applicable fees for technical assessment of the project by our In-House Engineers.