Abstract
This paper aims to introduce one of the common contracts in the field of Islamic finance, which is the diminishing musharakah contract or the diminishing musharakah ending with ownership. Which is considered one of the modern methods that Islamic banks deal with, and it is a new investment method that was not known to the oldest jurists, and it is one of the Shariah financing formulas to counter interest-based dealings with interest-based banks. This paper demonstrate this contract after the introduction with historical background on it. Then explain its reality in theory and how to apply it in Islamic banks or traditional banks that offer Islamic products. This paper did not address the discussion of shariah issues in detail - due to the large number of jurisprudential differences in them - as well as the limited space for the paper. This paper focused on the practical application of this contract in Malaysian Islamic banks. Then the research concluded with the conclusion that this contract is considered one of the most suitable contracts that Islamic financial institutions can offer as a product in which the operational problems and Shariah problems are reduced. Especially after the decision of the Sharia advisory council of the Central Bank of Malaysia (SAC - BNM) at its 56th session on February 6, 2006, where it decided that "Musharakah Mutanaqisah (MM) financing is a form of contract recognized in the Islamic financial system".
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