Bay Bithaman Ajil

Bay Bithaman Ajil (BBA), meaning 'sale with deferred payment,' is an Islamic financing contract in which an asset is sold at a marked-up price to be paid in instalments over an agreed future period. The seller discloses the cost price and the profit margin (distinguishing it from an undisclosed mark-up), and the buyer acknowledges the deferred payment schedule at contract inception. BBA is widely used in Malaysia for home financing, vehicle financing, and personal finance — essentially functioning as a credit sale alternative to conventional instalment loans. The key Shariah conditions are: (1) the asset must be genuinely owned by the seller before sale (ownership and risk must transfer); (2) the price and payment schedule must be fixed at inception (no floating payments); (3) the deferred price may legitimately exceed the spot price, as the mark-up compensates for time value through genuine commercial risk (not interest); and (4) once agreed, the price cannot be increased for late payment (though contractual rebate — Ibra' — may be offered for early settlement). AAOIFI Shariah Standard No. 8 (Murabahah) overlaps significantly with BBA, and some scholars treat BBA as a variant of Murabaha with an instalment structure. The IOF CORE_ISLAMIC_CONTRACTS rail implements BBA with full ownership-transfer verification, deferred payment scheduling, and Ibra' (early settlement rebate) calculation engine.