Operational Procedure of HPSM

M. Kabir Hassan, Muhammad Mostofa Hossain () and Aishath Muneeza ()
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Muhammad Mostofa Hossain: University of Malaya
Aishath Muneeza: International Centre for Education in Islamic Finance (INCEIF University)

Chapter Chapter 5 in Hire Purchase Under Shirkah al-Milk (HPSM) in Islamic Banking and Finance, 2023, pp 109-128 from Springer

Abstract: Abstract This chapter addresses the challenge of consolidating diverse HPSM procedures across global banks by focusing on the illustrative example of Islami Bank Bangladesh Limited (IBBL) and the Malaysian Hire Purchase Act 1967. By examining these practical implementations, the chapter aims to enhance transparency, strengthen stakeholder confidence, and mitigate deficiencies in contract execution procedures that may impact customer satisfaction. The core objective is to illuminate the practical application of HPSM in Islamic banking and finance, unravelling its key aspects and procedures. The chapter explores the operational dynamics of HPSM, elucidating the contractual framework and roles of stakeholders such as buyers, sellers, and financial institutions. Emphasising mutual consent, transparency, and risk-sharing, it underscores the significance of these principles in HPSM transactions. The chapter systematically guides through the execution of Shari’ah-compliant HPSM contracts, encompassing procedures and documentation from application to ownership transfer. It underscores the necessity of due diligence and contractual obligations. Finally, this chapter equips readers with valuable insights to navigate HPSM transactions in the Islamic banking and finance context. Catering to individuals, professionals, and researchers, it provides a comprehensive understanding of real-world implications of HPSM.

Keywords: HP; Hire Purchase; HPSM; HPSM contract (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-50105-0_5

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DOI: 10.1007/978-3-031-50105-0_5

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