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a) Meaning: Shirkat means partnership; al-Milk means the ownership; Shirkatul Milk means share in the ownership. b) Definition : When two or more persons supply equity, purchase an asset/property (nonfungible goods), own the same jointly in proportion to their respective equity, share the benefit as per agreement and bear the risk in proportion to their respective ownership ratio, the contract is called a Shirkatul Milk Contract. Purchase (Bai) a) Meaning: Bai means buying and selling. b) Definition: Bai is a contract between a buyer and a seller under which the seller sells and transfers the ownership of certain goods asset/properties to the buyer in exchange for a fixed price paid by the buyer. OPERATIONAL PROCEDURE OF HIRE PURCHASE UNDER SHIRKATUL MILK The Modus Operandi of Hire Purchase under Shirkatul Milk will be as follows: Step One: Induction of Client 1. The Branch manager and officers concerned should search for and if found shall cordially receive the potential investment client. 2. The Branch shall exchange views about the business of the prospective client and assess his capability, experience, business needs etc. 3. The branch shall explain to the client the detail procedure of HPSM mode of investment and the terms and conditions under which the bank makes such investments. 4. And explain to him the various aspects of investment under Islamic Shariah principles. 5. On completion of the assessment of client’s capability, business experience, commitment and his business needs, if everything is found satisfactory, the branch shall request the client to open an Al-Wadiah current A/c and to operate the same satisfactorily at least for six months. 6. If not found satisfactory, the branch shall regret him politely. 7. On being satisfied with performance of the client, if the branch thinks it wise, will request him to submit a formal application for HPSM investment and provide him with an application form. STEP TWO : PREPARING APPLICATION 1. If the Investment proposal falls within the discretionary power of the Branch, they shall obtain only one copy of Application duly filled in and signed by the client.

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