 In this module, we would be studying a simple lease arrangement or a simple lease agreement or a simple lease contract. What is a simple lease contract in Arabic or in the context of Islamic banking and finance? It is called Ijara. What is Ijara? One party which is called Lassore who owns an asset to be leased leases it to someone else who is called Lassi for an agreed price which is called rent and of course for an agreed period. So there are three or four things in this, there are two parties, we call the party one Lassore who is giving something on a lease. Lassi is called who is taking something on a lease and should be an agreed period and should be an agreed rent. So, transacting parties, Lassore, Lassi, agreed time period and the agreed rental and of course the asset to be leased must be there as well. So the leased asset in a simple lease contract must be available for the use of the Lassi. This is important in a simple lease contract, there is also a form of a lease contract in which the leased asset is not there at the beginning and we will discuss it in due time. In case of simple lease, the asset to be leased must be available for the use of the Lassi at least when the lease period starts. If the asset is not available for use then how can it be given to Ijara? This is true in case of a simple lease contract however we would discuss a special case where this requirement may not be there. And obviously this is a requirement that the Lassi must pay the rent in accordance with the terms and conditions of the Ijara contract. If the Ijara contract stipulates that the rental must be paid on the first day of the lease period then the Lassi must do so. If the requirement is to pay the rental at the end, the Lassi will have to observe that clause in the lease contract or in the Ijara agreement. There are certain important considerations in Ijara. Number one, the Lassi cannot be held responsible for the loss of the asset when the Lassi is not negligible. If a house has been leased out to someone and after some time because of some calamity or because of something that happens which is not because of the Lassi, the Lassi would not be held responsible for this loss. And this loss would be borne by the owner of the leased asset who happens to be the Lassur. Because the Lassur is the owner of the asset, this is why it's important that the maintenance of the leased asset is responsibility of the owner. So this is the second consideration which is very important. However, to ensure that any kind of risk is properly managed, the Lassur can ask the Lassi to buy the insurance for the lease period. However, the cost of that insurance would be borne by the Lassur. This simple lease or Ijara is also called operating lease. Islamic banks however, they do not in general practice operating lease. There are some specialized institutions like Mudaraba companies in Pakistan. The leasing Mudaraba's they practice operational lease or the simple Ijara, especially when they lease out office equipment or industrial machinery. Apart from this one Islamic banks, especially Islamic retail banks, they do not practice operating or operational lease. Rather they use another form of Ijara which we would be considering and attempting to understand in due time.