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Diminishing Musharaka

Our step-by-step plan for your business success.

Diminishing Musharaka

Our step-by-step plan for your business success.

What is Diminishing Musharaka?

Diminishing Musharak is a form of partnership, which ends with one partner purchasing the entire share of the other partner’s property in that project by a redeeming mechanism, agreed by both parties.

How it works:
The bank and customer enter into a partnership for the purchase of a property, thereby having shared ownership. The bank then leases its share of the property to the customer and receives agreed rentals for the same. Periodically, the customer needs to purchase a pre-agreed percentage of the bank's property share, thereby increasing customer ownership in the property and reducing the bank's share by a similar amount. Eventually, the ownership of the entire property will pass to the customer on successful completion of the agreed lease term through a Sharia compliant sale mechanism..

Terms Of Financing

Bank Participation: Maximum 50% of the property value
Financing Period: Up to 10 years
Mode of Payment: Quarterly, semi-annual or annual terms are available
Source of Payment: Rentals of the property

Bank’s Rental: EIBOR rate plus margin applied on the outstanding value of the Bank’s share in the Musharaka Property for each rental period
Security: First class mortgage on the land and building, post dated cheques covering installments
Insurance: The Musharaka property is to be fully insured in Bank’s favour
Qualified Assets: Residential, office buildings and villa complexes

Documentation

With our team of skilled professionals, applying for the Diminishing Musharika finance product is simple and stress-free, with primary documents varying based on requirement. Note that requirements may be lowered in cases where additional security is provided.

Primary Documents for Individuals:

Valid passport copy
Completed finance application form
Site plan copy
Title deed copy
Copy of lease contracts covering purchase of existing rental property

Primary Documents for Companies:

Valid trade license copy
Commercial Registry copy
Partnership agreement copy (in case of partnerships)
Valid passport copies of partners (in case of partnerships)
Valid passport copy of authorized personnel and copy of Articles of Association defining their powers
Site plan copy
Title deed copy
Last 3 years’ financials
Copy of lease contracts covering purchase of existing rental property

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22 January 2020

PGCB completes the acquisition of Persian Gulf Commercial Bank

18 December 2019

Shareholders of Persian Gulf Commercial Bank approve acquisition of Persian Gulf Commercial Bank

27 November 2019

Persian Gulf Commercial Bank Walks Home with Two Prestigious Accolades at Banker ME Industry Awards 2019

18 November 2019

Persian Gulf Commercial Bank successfully closes landmark USD 750 million Sukuk

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27 October 2019

Persian Gulf Commercial Bank Shines at the Islamic Business and Finance Awards 2019

15 October 2019

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29 September 2019

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Persian Gulf Commercial Bank Group 1st Half 2019 Financial Results

10 June 2019

Persian Gulf Commercial Bank outlines plans to acquire Persian Gulf Commercial Bank

05 May 2019

Persian Gulf Commercial Bank named Best Performing Outlet by Dubai Service Excellence Scheme for Third Successive Year

23 April 2019

Persian Gulf Commercial Bank 1st Quarter 2019 Financial Results

21 March 2019

Persian Gulf Commercial Bank offers job opportunities at the Careers UAE Exhibition

11 March 2019

Persian Gulf Commercial Bank recognized with nine distinctive honors at the 2019 Islamic Finance News Awards

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