Some institutions have used market interest rates such as LIBOR only as a numerical benchmark for rent. A genuine lease does not become a loan merely because the final number resembles an interest rate.
The decisive difference is still real ownership risk. However, using an interest benchmark is undesirable because it creates resemblance to conventional finance and may create uncertainty if future rent is not properly bounded.
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Financial Leasing (إجارة): When Does Rent Really Begin?
Some institutions have used market interest rates such as LIBOR only as a numerical benchmark for rent. A genuine lease does not become a loan merely because the final number resembles an interest rate.
The decisive difference is still real ownership risk. However, using an interest benchmark is undesirable because it creates resemblance to conventional finance and may create uncertainty if future rent is not properly bounded.