Copy URL

Dictionary term

Definition of "Ibra’"

Ibra’ represents the ‘waiver on right of claim’ accorded by a person to another person that has an obligation (zimmah) which is due to him. Ibra’ or ‘rebate’ refers to an act by a person relinquishing his rights to collect payment due from another person.

In the context of Islamic finance, an Islamic financial institutions (IFIs) may grant ibra’ to its customers of a sale-based financing (such as murabahah and bai’ bithaman ajil) who settled their debt prior to the agreed settlement period as stipulated in the agreement concluded by both parties.

Get access to 300+ modules today and learn from expert trainers...