Certainly, only a financial system with such noble values can keep at bay any economic adversity in a society, and is bound to create equal opportunities towards...


Sukuk Issuance

Understanding the project

Structuring the project
Pre-marketing feedback

Transaction legal documents and Fatwa


Salam  Sale commodity 

Like istisna, Salam is another sale structure where certain commodity is transacted before coming into existence. In Salam, seller undertakes to supply certain commodity in future...


Istisna - Build / Manufacture

  • Istisna, in Arabic, means to build, develops or manufacture.
  • Istisna is adopted to purchase the construction of building, and manufacturing of vessels, aircrafts, etc.`
  • Istisna can also be used for setting up green-field industrial projects.
  • Islamic bank agrees to build asset / project as per a given description and enters into istisna contract with client. Here, Islamic bank is sani or seller and client is mustasni or buyer.
  • Title to "Described Asset " is passed to the client upon entering into istisna contract.
  • Contrary to general perception, to fix does not require a separate contract to be signed for transfer of title upon completion and delivery of the istisna asset to the client.
  • Price, payment terms and specifications are agreed between client and Islamic bank in the istisna contract.
  • Price may be paid in cash or in phases, as job progresses.
  • Client ( buyer ) is obliged to take delivery of the asset upon completion.
  • An Islamic bank will have complied with its obligations under istisna contract if the asset is completed according to agreed specifications and the client ( buyer ) will be obliged to receive the asset as per contract.
  • Client can claim damages if the asset has not been developed as per agreed specifications and client want to fix the shortfalls.
  • To avoid such risk, Islamic bank may seek the client to choose the contractor to whom Islamic bank will award the work under a parallel istisna contract. This also provides satisfaction to the client as to the competence of the contractor.
  • When an Islamic bank enters into a parallel istisna contract with the client’s selected contractor, the terms of the main istisna contract are mirrored in the parallel istisna contract.
  • Nevertheless, both istisna contracts are considered totally independent of each other in the eyes of sharia.
  • Although title to described istisna asset is passed to purchaser upon signing the contract, purchaser does not assume any ownership risks till delivery of completed asset by the seller.
  • This is to protect the interest of the purchaser and is as per sharia principles.