2. DEFINITION
 Literally :
Deferred payment sale.
 Technically:
Sale contract in which the payment of the
price is deferred and payable at a certain
particular time in the future.
 A contract whereby the commodity is delivered
immediately and the price is paid by installment.
 The selling price includes a profit margin agreed
by both parties and the profit is not an interest
payment, however it is part of the sell price.

3. NATURE OF BBA
BBA is essentially to sell something with a prompt
delivery of sold items to the purchaser while the
payment is postponed until a specified date in the
future or through installment (taqsit).
Can be implicated for other sale contracts including
bay’ Musawamah and bay’ al-Murabahah. (not
applicable for salam contract).
In the Malaysian context the selling price both in bay’
al-Murabahah and BBA is based on the cost price.
However Murabahah is used for short-term
transactions while BBA is used for longer-term
transactions.

4. EVIDENCE
 In general, no issue arises from the practice of
deferring the payment of sale price.
 In a Hadith by a companion, Jabir :
that the Prophet (s.a.w) bought a camel from
him outside the city of Madinah whereby the
payment was settled later on in Madinah.
 In another Hadith narrated by Aisha r.a :
that the Prophet (s.a.w) bought a meal from
one Yahudi with deferred payment, and he
mortgaged his iron shirt made from iron.

5. PILLARS OF BBA
Seller Buyer
Sighah
Asset/
Goods
Price

8. TIME VALUE OF MONEY IN BBA
Hadith did not specifically mention whether such
increment is allowed on the basis of its
deferment.
According to majority jurists:
increasing the price due to the deferment in the
payment is permissible because the increase is
against the commodity and not against the
money.
It’s permissibility is based on legal proof nass
and by the testimony of the jurists by
consensus.

9. APPLICATION
In Malaysia, BBA financing is employed by bank to
provide medium to long-term financing to clients for
acquiring e.g. Property, land, motor vehicles,
consumer goods, shares, overdraft facility,
education financing package etc.
Home financing is the most popular facility granted
under the concept Bai Bithaman Ajil (BBA) either to
purchase existing completed houses, build or
construct new house on customer’s land even as a
refinancing facilitiy.
In BBA, the customer sells the property purchased to
the bank for a cash sum paid to the customer and the
property will then be immediately resold back by the
bank to the customer at higher price which include
the bank’s profit on the sale, payable by the customer
to the bank by monthly installments over a fixed
period of time.

10. CLIENTS INTEND TO ACQUIRE
THE FOLLOWING ITEM:
Houses / Shop houses
Land
Motor vehicle
Consumer goods
Shares
Overdraft facility
Education financing package
Personal financing
Other suitable and acceptable goods