Al-bai‘ li-’ajal

Definition of "Al-bai‘ li-’ajal"

Lit: Deferred sale scheme. Tech: A method of instalment sales adopted by some Islamic banks. According to this, the bank arranges to provide an asset on credit, the credit price being higher than the cash price, but the ownership of the asset is passed on to the client immediately. The bank agrees to receive back its money in instalments. There is no recourse to the bank if the client defaults.