Purchase undertaking issues in musharakah mutanaqisah home financing

This article aims to analyse the diminishing musharakah in retail financing products by examining its features in order to determine its inclination either towards shirkah al-milk or shirkah al-'uqud. The study also examines the legitimacy of first and second promises(wa'ad) to gradually purchase bank's portion by the customer and to purchase in credit bank's portion in the event of default. The study applies qualitative research method comprises of document analysis and interviews with the players. The study shows that the house financing is a shirkah al-milk in its initial stage, but it could not be considered permanently as shirkah al-milk as it does not comply with all features of shirkah al-milk. It also found that scholars were disputed in allowing pre determined price of bank's portion or share on the house, and stipulating second promise in the event of default