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Bai-Salam
 
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Bai-Salam is a combination of two Arabic words Bai and Salam. Bai refers to Purchase and Sale while Salam means Advance. Payment of Bai-Salam transaction is made in advance. It is a form of sale on delayed terms in which the money may be paid first and the goods delivered at a later date.

Salam is sale whereby the seller undertakes to supply some specific goods to the buyer at a future date in exchange for an advanced price fully paid on the spot. Bai-Salam may be defined as a contract between a Buyer and a Seller under which the Seller sells in advance the certain goods permissible under Islamic Shari’ah and the law of the land to the Buyer at an agreed price payable on execution of the said contract and the goods is/are delivered as per specification, size, quality, puantity at a future time in a particular place.

 
 
  Components:      
    The contract parties i.e. Seller and Buyer
     
    The price and the merchandise
     
    The specifications of the contract.
     
  Key Features:      
 
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A commodity /product sold without having the same in existence or possession of the seller. Commodity ready for sale, Bai-Salam is not allowed in Shariah.
   
         
 
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Generally used to infuse finance so that production is not hindered due to shortage of fund/cash and as such. Industrial and agricultural products are purchased/sold in advance under Bai-salam.
   
         
 
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Permissible to obtain collateral security from the seller to secure the investment from any hazards (non supply, partial supply, low quality).
   
         
 
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Permissible to obtain mortgage / or personal guarantee from a third party before or at the time of signing the agreement.
   
 
   
 
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Bai-Salam on a particular commodity/product or on a product of a particular field or farm cannot be effected (Agri. Product only).
   
 
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The seller (manufacturer) client may be made agent of the bank to sell the goods delivered to the bank by him and a separate agency agreement is to be executed between the bank and the client (Agent).
   
       
  Diference between Istisna’a and Bai-Salam:    
 
Bai-Istisna’a Bai-Salam
1 The subject of istisna’a is always a thing which needs manufacturing. 1 Bai-Salam can be effected on anything, no matter whether it needs manufaturing or not.
2 It is not necessary in Istisna’a that the price is paid in full in advance. 2 It is necessary in Bai-Salam that the price is paid in full in advance.
3 The contract of Istisna’a can be cancelled before the manufacturer starts the work. 3 The contract of Bai-Salam, once effected, can not be cancelled unilaterally.
4 It is not necessary in Istisna’a that the time of delivery is fixed. 4 The time of delivery is an essential part of the sale in Bai-Salam.
   
 
     
 
Profit rates of Investment products:
   

 

 

 

 

 

 

 
  
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