AutoFinance
Features:
BankIslami’s Auto Finance offers you the Convenience to get the car of your choice, the Shariah Compliant way.
| Auto Financing facility for | All locally manufactured new/used vehicles |
| Tenure of Auto Financing | 1 to 5 years (for vehicles with up to 1000 cc engine capacity) 1 to 3 years (for vehicles above 1000 cc engine capacity). |
| Customer Equity | Minimum 30% to Maximum 90% |
| Financing Amount | Minimum Rs. 500,000/- Maximum Rs. 3,000,000/- |
| Processing Charges | Application Fee: Rs. 2,449/- (exclusive of FED)
Documentation charges as per actual. |
| Tracker Installation | Tracker installation is Mandatory for All Vehicles and tracker shall be installed by BankIslami Pakistan Limited. |
| Takaful | Rate: 1.49% (Rate may vary for special vehicles) |
Islami Auto Finance facility is based on Diminishing Musharakah under Shirkat-ul-Milk arrangement. Under this joint partnership agreement, BankIslami Pakistan Limited share in vehicle is represented by Musharakah units. The Bank will rent out its share in vehicle to you in exchange for periodical rents claimed. In addition to periodical rental payment, you will purchase BankIslami Pakistan Limited share (Musharakah units) on a periodical basis. Upon purchase of all Musharakah units, you will become the sole owner of the vehicle.
DM Concept:
Concept of DM based Auto Financing:
Diminishing Musharakah (DM) is a partnership transaction in which the partners agree to terminate Shirkat (partnership) gradually by means of purchase of one partner’s share by other partner.
Under Diminishing Musharakah financing, the Bank and its client participate in the ownership of an asset on the basis of ‘Shirkat-ul-Milk’ (i.e. Joint ownership)
A DM based Auto financing transaction comprises of mainly following three steps:
- Participation in the ownership of an asset by Bank and Client (i.e. creation of Musharakah) and dividing Islamic Bank’s ownership share into a number of Musharakah units;
- Bank rents out its share of ownership in the asset to the Client (i.e. Ijarah transaction between Islamic Bank and Client); and
- Gradual sale of Musharakah units by Bank to the client on periodic basis and at the end of the financing tenure client becomes the sole owner of the asset.
A DM Financing is a combination of Musharakah, Ijarah and Sale transaction. Therefore, all rules pertaining to Musharakah, Ijarah and Sale transactions are applicable to a DM transaction.
All the three transactions are independent and are executed through separate contracts.
To Understand the Difference between Diminishing Musharakah and Conventional Long Term Financing kindly Click
How it Works?:
How It Works
- Approach BankIslami Pakistan Limited and identify the vehicle to be acquired on Diminishing Musharakah basis under Auto Finance Facility
- Fill in the Application Form and submit the required documents Download Application Form
- BankIslami will process the application and approve or reject the credit application, depending on customer’s eligibility on Bank’s risk criteria
- Once the application is approved, you will sign an ‘Undertaking to Musharakah’ whereby, you will undertake to formalize Shirkat-ul-Milk Agreement and execute other transaction documents after arrival of Musharakah Asset (Vehicle).
- After Undertaking to Musharakah, Booking of Vehicle is made by the Bank at the dealer
- After the vehicle arrives at the dealer and is purchased by the Bank, Part payment/ Full payment to dealer will be made for booking / purchase of Vehicle and you will sign Shirkat-ul-Milk Agreement and Payment Agreement. You will also sign an ‘Undertaking to Purchase Musharakah Units’, the Bank will rent out its ownership share in the vehicle to you against periodic rental payments.
- Being joint owner of the vehicle, principally Bank and Customer are liable to share the expenses like registration, Takaful cost etc. However as Bank pays the total expenses, therefore, such expenses are accounted for while determining the rental amount
- Withholding Tax/ Advance Income Tax (On Cost) will be borne by BankIslami Pakistan Limited, as Title of the Vehicle is in BankIslami Pakistan Limited name
- Advance to Financing Tax will be at 4% (or whatever the rate may be changed to by the Govt of Pakistan) from Non-filers at the time of agreement.
- On periodic basis, you will purchase BankIslami Pakistan Limited share in units, and at the end of the transaction tenure, you will become the sole owner of the Vehicle
- In case, you wish to terminate the Agreement before the agreed period, you will have an option to buy the vehicle on the agreed buy-out price given in the Undertaking to Purchase Musharakah Units
Eligibility:
| Citizenship | Pakistani |
| Income | No Minimum Income Requirement |
| Age Limit | For Salaried/ Businessmen/ Self Employed Professionals (SEP’s) |
| Minimum 18 Year (At the time of Booking/ Financing) | |
| Maximum 65 Years (at the time of Maturity) |
Documentation:
Documents Required: Download Document Checklist
- Salaried Individuals
- Application Form properly filled and signed by customer
- SBP undertaking properly filled and signed by customer
- 6 Month’s Bank Statement, Where Salary Credits (Original / stamped & signed by bank)
- Current Salary Slip
- Signature Specimen Form
- Clear and Visible Copy of CNIC
- Processing cheque Rs. 2,449 (exclusive of FED) drawn on the bank of which statement is approved.
- Businessmen/ Self Employed Professionals (SEP’s)
- Application Form properly filled and signed by customer
- SBP undertaking properly filled and signed by customer
- 1 Year Bank Statement, (Original / stamped & signed by bank)
- Proprietorship letter from Bank / Partnership Deed / Proof of shareholding, as the case may be
- Signature Specimen Form
- Clear and Visible Copy of CNIC
- Processing cheque Rs. 2,449 (exclusive of FED) drawn on the bank of which statement is approved.
- Copy of NTN and copy of Income Tax Returns or Any Authentic Business proof
- NOC from partners or other shareholders, as the case may be
FAQs:
Q. At what point will I be obliged to start making the Monthly payment?
- The Monthly payment will commence from the date on which the Vehicle will be delivered to the client, no matter whether the Customer has started using it or not.
Q. Will the rental differ for different phases during the Financing period?
- The rental will be revised on every Six months of Financing as per agreed formula mentioned in Payment Agreement.
Q. Is there a penalty for late payment of rent?
- The Bank gives its share to customer on rental basis under separate lease agreement wherein customer undertakes that if he/ she fails to pay rent on due date, he/ she will pay certain amount to charity through BankIslami. The charity is utilized by BankIslami for charitable purposes and is not included in the income of the bank.
Q. Which company covers the Takaful (Islamic Insurance) amount of the vehicle?
- Takaful coverage is provided by UBL Insurers (Pvt.) Limited, Adamjee Insurance Company Ltd- Window Takaful Operations (WTO), Jubilee General Insurance- Window Takaful, TPL Direct Insurance Ltd (WTO) and Century Insurance Company Limited (WTO)
Takaful Coverage: Ranging from 1.5% to 2.8%
Q. How much will I be charged if I choose to avail the premature payment option?
-
- In case of Premature termination, the purchase price will be calculated as follows:
- Outstanding Unit price
- Early Purchase additional price i.e. 5% to 8% of the outstanding unit price
- The uncovered portion of the Takaful premium paid for the year
- The unrecoverable portion of Registration charges
- Tracker charges (if applicable)
Q. Which models are being offered by Bank for Auto Financing?
- All models of locally manufactured vehicles which are not more than 12 years old at the time of Maturity and 9 years old at the time of Financing.
Q. Does Auto Financing contract contain any hidden charges?
- The Auto Financing contract provides details of all charges taken in monthly payments. Other than defined in Auto Financing contract, there are no hidden or extra charges additionally taken by BankIslami.
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Conventional Lease DM based Auto Financing Commencement: Commencement: Lease commences the day price is paid by the lessor, whether the lessee has taken delivery of the asset or not. At BankIslami, Bank and customer jointly purchase the vehicle and after acquisition Bank gives its share in the vehicle to the customer on rent. According to Shariah, rent is charged after the customer has taken delivery of the asset, not from the day the price has been paid. Liabilities of the Parties in case of Loss to the Asset Liabilities of the Parties in case of Loss to the Asset Asset Under conventional Auto Leasing, the customer bears all kinds of loss or damage to the vehicle, whether the loss caused due to his negligence or not. As BankIslami and Customer are the joint owner of asset, therefore, both are liable to bear all kind of loss or damage to the vehicle as per their ownership ratio in the assest unless the loss occured due to the negligence of either party. In case of total loss, any short fall in Takaful/Insurance claim has to be borne by the customer to compensate the total outstanding amount of the bank. In case of total loss, any short fall in Takaful/Insurance claim shall be borne both by the bank and customer as per their ownership share in the asset at the time of loss. All expenses like registration charges, insurance charges etc. are paid by the lessee. Being joint owner of the vehicle, principally Bank and Customer are liable to share the expenses like registration, takaful cost etc. However as Bank pays the total expenses, therefore, such expenses are accounted for while determining the rental amount. Penalty on Late Payment: Penalty on Late Payment: Penalty charges exist on late payment. These are taken as income. Bank gives it share to customer on rental basis under separate lease agreement wherein customer undertakes that if he fails to pay rent on due date, he will pay certain amount to charity through Bankislami. The charity is utilized by Bankislami for charitable purposes and does not include in the income of the bank. Termination of Lease Termination of Lease Lessor has power to terminate lease unilateral without any reason. Either party can terminate the lease contract as per the terms of the agreement.
Q. After expiry of the Financing period, can the vehicle be transferred to me?
- After the Gradual sale of Musharakah units by Bank to the client on periodic basis, you become the sole owner of the asset at the end of the financing tenure.
Q. Which mode of Financing is currently being used by ‘Islami Auto Finance’?
- The mode of Financing currently used by ‘Islami Auto Finance’ is ‘Diminishing Musharakah’ mode.
Q. Who can apply for Auto Financing facility?
- 1.Salaried Employed
2.Self-Employed Professionals (SEP’s)
3.Self-Employed Businessperson (SEB’s) / Businessmen
4.Rental Income
5.Remittance Income
6.Agriculturists
7.Lien on TDR
8.Pensioners
Q. What is the minimum and maximum Financing limit on Auto Finance?
- The Financing limit on Islami Auto Finance is:
• Minimum Financing Amount: Rs. 500,000/-
• Maximum Financing Amount: Rs. 3,000,000/-
Q. What is the minimum and maximum Age limit at which one can apply for Auto Finance facility?
- For Salaried professionals:
• Minimum Age limit: 18 years (At the Time of Booking/ Financing)
• Maximum Age limit: 65 years (At the Time of Maturity)For Businessmen/ Self Employed Professionals (SEP’s):
• Minimum Age limit: 18 years (At the Time of Booking/ Financing)
• Maximum Age limit: 70 years (At the Time of Maturity)
Q. What is the Customer’s Contribution for Auto Finance facility?
- The Customer can contribute a minimum of 30% Customer equity up to a maximum of 90%
Q. What is the Financing Tenure for Auto Finance?
- 1 to 5 years (for vehicles with upto 1000 cc engine capacity)
1 to 3 years (for vehicles above 1000 cc engine capacity)
Q. What is the Age of Vehicle for financing Used Vehicle?
- Not to be more than 12 years old at the time of Maturity and 9 years old at the time of Financing.
Q. Which models of cars are being offered by Bank for Auto Financing?
- All locally manufactured new/used vehicles
Imported vehicles cannot be finance (as per SBP regulations).
Glossary: (Auto Finance):
| Acronym | Description | Acronym | Description |
|---|---|---|---|
| BTF | Balance Transfer Facility | DBR | Debt Burden Ratio |
| SEP | Self-Employed Professionals | SEB | Self-Employed Businessmen |
| TC | Tele-caller | TMP | Total Monthly Payment |
| RV | Residual Value | WHT | Withholding Tax |
| CO | Collection Officer | CIU | Credit Initiation Unit |
| CAD | Credit Administration Department | C&R | Collection & Recoveries |
| DLC | Delinquency Life Cycle | DPD | Days Past Due |
| EAMVU | External Agency Management and Verification Unit | EV | External Verification |
| FC | Field Co-Ordinator | FE | Front-End |
| FMS | Financial Management System | HC | Hardcore |
| IV | Internal Verification | MR | Mid-Range |
| NOC | No Objection Certificate | RCAD | Regional Credit Administration Department |
| RSBM | Resident Shariah Board Member | SBP | State Bank of Pakistan |
| PTP | Promise to Pay | PNI | Payment Not Issued |
| DO | Delivery Order |
Apply Now:
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Exclusive Offer
1. Rental options: Fixed for 1 to 3 years, starting from 4.99%*
2. Takaful rate: As low as 0.99%*
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Exclusive Offer
1. Rental options: Fixed for 1 to 3 years, starting from 0%*
2. Takaful rate: As low as 0.99%*
3. For fleet customers only
Offer valid till 31st Oct 2025.
Terms & Conditions apply*
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2. Takaful rate: As low as 1.49%*
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Features and Benefits:
AutoFinance
Introduction
Drive into a greener future with BankIslami’s PAVE Finance. This Shariah-compliant initiative, part of the Government of Pakistan’s Pakistan Accelerated Vehicle Electrification (PAVE) program, makes green technology accessible and affordable. By replacing high fuel costs with the efficiency of electric power, you can significantly reduce your daily operational expenses.
Purpose
This program helps individuals and small business owners escape the stress of rising petrol prices by switching to electric vehicles. By offering affordable, digital-based financing at subsidized rates, we are helping our customers save money on daily fuel costs and build a more sustainable future.
Financing
Financing of up to PKR 200,000 for e-Bikes (two-wheelers) and up to PKR 880,000 for e-Rickshaws / e-Loaders (three-wheelers).
Equity Participation
Finance-to-Equity ratio of 80:20
Pricing
End-User Profit Rate: 0%
Processing Charges
No Processing Charges
Tenure
Financing tenure is set for a maximum of 2 years for e-Bikes and up to 3 years for e-Rickshaws and e-Loaders.
Security
- Financed vehicle itself serves as the mandatory collateral
- Vehicle will be marked with Hypothecation (HPA) in favor of BankIslami
Eligibility
- All citizens of Pakistan (including GB & AJK)
- Age limit: 18–65 years for e-Bikes
- Age limit: 21–65 years for e-Rickshaws and e-Loaders
Takaful
Comprehensive Takaful is mandatory. First year’s cost is taken in advance, while subsequent years are pro-rated into monthly installments.
Digital Application Submission
The entire solicitation process is initiated via the PITB digital portal, where customers apply online and select BankIslami as their preferred institution.
How to Apply
The application process is handled through a digital-first platform with minimal human interaction.
Apply Now via the Official PAVE Portal: https://pave.gov.pk/home
Apply Now
BankIslami
Instant Auto Finance for New/Used Vehicles
Getting Your Dream Car was Never This Easy!
Your dream Car can be yours in an Instant with BankIslami Instant AutoFinancing throughout our web portal!
BankIslami
Registered / Head Office
11th Floor, Executive Tower, Dolmen City, Marine Drive, Block-4, Clifton, Karachi.
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