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Al Bai Bithaman Ajil- The Grant Of Ibra In Customer Default Situations, Jonathan Chen Yeen Muk

Jonathan Muk

The Al Bai Bithaman Ajil (“BBA”) facility is an Islamic financing facility based on underlying purchase and sales agreements. When bank customers default on their instalment obligations under the facility, the grant of ibra (rebate) in Al Bai Bithaman Ajil (“BBA”) facilities is a contentious issue. This article provides an analysis of the Malaysian judgments with respect to ibra and BBA facilities. It seeks to identify the best way for courts to approach ibra in the absence of legislation or executive direction. It is suggested that while implied terms, unconscionability and even recharacterisation of the BBA facilities have been used …