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MUQASSAH - Coggle Diagram
MUQASSAH
Types and their conditions
Mandatory set-off
spontaneous discharge of 2 debts that is not contingent on the consent of both or either party.
each party should be a debtor & creditor
both debts be equal in kind, description & maturity
not bring harm to the contracting parties
should not result in violation of the Shari'ah
Mandatory set-off on demand
affected by demand of one party to discharge debts by way to set-off
each party should be a debtor & creditor
both debts should equal but not necessarily same in quality and date mature
should not result in violation of shariah
Contractual set-off
the discharge of 2 debts by the consent of 2 parties to extinguish their obligations towards each other.
each party should be creditor and debtor
both parties must consent to the muqassah
should not result in violation of the Shari'ah
Legality
Quran
it is permissible for the IFIs & their customers to exchange bilateral promises to settle debts
Definition
refers to debt settlement by a contra transaction or set-off