Perpetual sukuk are a sukuk issue that does not mature and hence sukuk are treated as equity (huqooq al-mulkiyyah) rather than debt (dayn). Perpetual sukuk have no fixed maturity date (final redemption date) and are viewed as part of Tier-1 capital or tranche 1 (according to Basel III)- or the ‘going concern’ or total paid up capital that can absorb losses while the bank is still solvent. Sukuk holders cannot redeem their certificates (sukuk) unless a redemption trigger event occurs. In case of redemption, sukuk may be redeemed in whole but not in part.

Perpetual sukuk are classified as part of equity, but not quasi-equity (QE), due to the fact that perpetuity and subordination render sukuk as such from an accounting standpoint. However, subordination may raise certain shari’ah issues, particularly if stipulated in the same contract with providers of funds.