Premium Essay

Salam Istisna

In: Business and Management

Submitted By hana13
Words 423
Pages 2

BANK (S) | SALAM | ISTISNA’ | | MALAYSIA FULL-FLEDGED ISLAMIC BANKS | Bank Islam Malaysia Berhad | Nil | Disclosed in the Notes to the Financial Statements – Financing, Advances and Others | Bank Muamalat Malaysia Berhad | Nil | Disclosed in the Notes to the Financial Statements – Financing of Customers | | MALAYSIA ISLAMIC BANKING SUBSIDIARIES | Affin Islamic Bank Berhad | Nil | Only mentioned in the Directors’ Report | Alliance Islamic Bank Berhad | Nil | Nil | AmIslamic Bank Berhad | Nil | Nil | CIMB Islamic Bank Berhad | Nil | Nil | Hong Leong Islamic Bank Berhad | Nil | Nil | Maybank Islamic Berhad | Nil | Nil | Public Islamic Bank Berhad | Nil | Nil | RHB Islamic Bank Berhad | Nil | Disclosed in the Notes to the Financial Statements – Financing and Advances | | MALAYSIA FOREIGN COMMERCIAL BANKS – ISLAMIC SUBSIDIARIES | HSBC Amanah Malaysia Berhad | Nil | Nil | Standard Chartered Saadiq Berhad | Nil | Nil | OCBC Al Amin Bank Berhad | Nil | Nil | | MALAYSIA FOREIGN ISLAMIC BANKS | Al Rajhi Banking and Investment Corporation Berhad | Nil | Nil | Kuwait Finance House Berhad | Nil | Disclosed in the Notes to the Financial Statements – Financing, Advances and Other Receivables (by contract) | Asian Finance Bank Berhad | Nil | Nil | | BAHRAIN ISLAMIC BANKS | ABC Islamic Bank - Arab Banking Corporation | Nil | Nil | Al Baraka Islamic Bank | Disclosed in the Notes to the Consolidated Financial Statements – Equity of Investment Account Holders, the Group is authorized to invest the funds on the basis of Salam, etc. | * Disclosed in the Executive Managements Report – income from Istisna’ Financing amounting to $0.79 million * Disclosed in the Notes to the Consolidated Financial Statements – Accounting Policies on Istisna’ Receivables * Disclosed in the Notes…...

Similar Documents

Free Essay


...manifestation of Mudarabah is the ‘two-tier Mudarabah’ model. The first tier (liability side) is formed when depositors place their funds with an Islamic financial institution which takes up the role of the mudarib. Mudharabah in fact is the investment deposits in Islamic banks. The bank then invests these deposits with entrepreneurs in the second tier (asset side) when the bank acts as the capital investor. Islamic financial institutions’ profits arise from a percentage of the returns from the second-tier mudarabahs. In practice however, on the deposit side mudarabah is dominant in the form of investment deposits, but on the asset side, 13 instead of muharabah Islamic banks assets are in the form of debt receivables from Murabahah, Istisna’ etc. Musharakah: The meaning of the Arabic word musharakah is derived from the word sharikah meaning partnership. A musharakah contract is very similar to the conventional sense of a partnership arrangement where each party contributes capital in their specific capacity and each partner has management rights in proportion to their investment. However, the share of profit for each partner is determined as a proportion of the final total profit rather than a ratio of capital invested. In the event of a loss, each partner is obliged to lose only the amount invested in the project. Within the premise of Musharakah there are two forms that Islamic financial institutions assume in the equity of companies. Permanent Musharakah: The bank......

Words: 21693 - Pages: 87

Premium Essay

Handbook of Isme

...Fatima Javaid Regulating Officer TABLE OF CONTENTS S.No 1 2 3 4 5 6 Background Introduction Prudential regulations for SME Financing Importance in light of Strategic Plan for Islamic Banking Industry Scope of Islamic Banking over Conventional Banking in current Financial crises Proposed Products for Islamic SME Financing Need for Risk Management 7 Murabaha Financing Transaction Structure Accounting Treatment Risk Management 12 12 15 15 18 20 18 21 24 25 26 27 29 30 31 31 33 34 35 35 38 39 40 PARTICULARS Page No. 1 2 4 9 11 8 Ijarah Based Financing Basic Rules Accounting Treatment Risk Management 9 Salam Based Financing Basic Rules Accounting Treatment Risk Management 10 Diminishing Musharaka Basic Transaction Structure Accounting Treatment Risk Management 11 Istisna Financing Flow of Transaction Accounting Treatment Risk Management 12 Project Financing Handbook On Islamic SME Financing BACKGROUND One of the important characteristics of a flourishing and growing economy is a blooming SMEs sector. Small and medium enterprises play an important role in the development of a country. SMEs contribute to economic growth in various ways like as by creating employment for rural and urban growing labor force, providing desirable sustainability and innovation in the economy as a whole. Further, a large number of people rely on this sector directly or indirectly. Most of the current larger enterprises have......

Words: 11186 - Pages: 45

Premium Essay

Islamic Banking and Finance

...Islamic Modes of Finance Theory and Key Shariah Principles Modes Of Finance • Two are ideal modes which provide an alternative to interest banking and if implemented on a national level will result in much fairer distribution of wealth in society 1. Mushaarakah – ‫رآ‬ (equity finance) 2. Mudhaarabah - ‫ر‬ (equity finance - sleeping partner) • Two are not ideal as they replicate the effects of conventional banking but nevertheless are tolerated in Shariah 3. Ijaarah - ‫( إ رة‬leasing) 4. Muraabahah - ‫( ا‬cost plus pricing) We will also briefly analyse Salam - , Istisnaa‘ – ‫ع‬ Tawarruq – ‫رق‬ ‫ ا‬and 1 Mushaarakah • “Mushaarakah” literally means sharing • “Mushaarakah” is derived from “shirkah” which means “being a partner”. • Mushaarakah is “a joint enterprises formed for conducting business in which all partners share the profit according to an agreed ratio while the loss is shared according to the ratio of investment” • It is an ideal alternative for interest based financing with far reaching effects on the economy. Types of Shirkah SHIRKAH SHIRKAT-UL-MILK joint ownership SHIRKAT-UL-‘AQD joint enterprise OPTIONAL via joint purchase NON OPTIONAL inheritance SHIRKATUL-AMWAAL SHIRKATUL-‘AMAL SHIRKATUL-WUJOOH mushaarakah Mushaarakah • The term Mushaarakah has been introduced recently by those who have written on the subject of Islamic modes of financing • It is normally restricted to a particular type of “Shirkah”, i.e.......

Words: 2768 - Pages: 12

Free Essay

Islamic Banks

...Islamic banking and finance in the UAE problems and prospects Islamic banking means the system that is based on the principles of Islamic law ( also known Shariah) and guided by Islamic economics. Two basic principles behind Islamic banking are the sharing of profit and loss and significantly the prohibition of the collection and payment of interest. Collecting interest is not permitted under Islamic law. Problems:- Most of the Islamic banks operate by-murabaha and by muazzal. Bai –salam,istisna, hire purchase leasing mode of investment i.e., islamic banks always prefer to run on mark up / guaranteed profit basis having shariah coverage for this reason some times the conventional economists and general people failed to understand the real difference between isalmic banking and conventional banking . ( mudaraba) and ( musharaka) are two modes of investment are ideal. But islamic banking are not going in this two modes the reasons for the above are as follows:- 1- There is systemic analysis and research and no real efforts to introduce above mentined two modes but the practitioners blame the following factors… - there is lack of committed enterpreneur. -there is lack of committed proffessional who can create new. – instruments ...

Words: 355 - Pages: 2

Premium Essay

Islamic Financial Contracts

...Sharikah al Abdan Sharikah al Wujuh Profit Sharing Revenue sharing Durable Assets Participation Musaqa Muzara‘a Output (Revenue) Sharing Involuntary: e.g., due to inheritance Voluntary: e.g., jointly purchasing a building for renting Sharikah al milk (Partnership based on joint Ownership) Temporary or Ongoing Musharakah Temporary or Ongoing Mudharabah Sharing Principle Fees deferred Ijara: Rents deferred Financial Murabahah Installment sale Object deferred Sale (ODS) Pre-paid istisna‘ Fees paid in advance Rents paid in advance Pure Salam SHARIKAT: PARTNERSHIPS Qard/Service Charge Heeba (Donations) 'Ariyah (qard of assets) Qard: Interest Free Loans TABARU‘AT: GRANTS Hemish Jedheya-Sale: Arboon in financial murabahah Deferred Trading Principle: Either price or object is deferred Arboon-Sale, in which major part of the price is deferred along with the object of sale Deferred lease: Both use of assets and payment of rents deferred Price deferred istisna‘: Projects or assets tailor-made payments deferred (Price & Object Deferred Sales: PODS* Pure Forward ** (Spot in future date) Future Sales Price deferred Sale (PDS)...

Words: 345 - Pages: 2

Premium Essay

Tr I-4 Technical Release

...on inventories; property, plant and equipment; intangible assets; investment property; and financial instruments. Other expenditure that do not qualify for recognition as an asset may be an item of expense. Purchase expenditure may also include financing costs. An entity may capitalise financing costs that are directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset in accordance with MASB approved accounting standards on borrowing costs. 14 Piecemeal or deferred delivery 15 Some Shariah compliant sale contracts may involve the performance by the entity of a contractually agreed task over an agreed period of time. For example, in Salam, the buyer pays first and delivery of the goods comes later. In Istisna’, the item is manufactured, fabricated, or constructed after the contract is entered into. 8 TR i-4 16 Some contracts may be directly related to construction contracts. Revenue arising from these contracts may be dealt with in accordance with the requirements specified in MASB approved accounting standards on construction contracts. Some contracts may give rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Such items may be dealt with in accordance with MASB approved accounting standards on financial instruments. 17 Linked transactions 18 An entity that has entered into a series of transactions which involves one or more Shariah......

Words: 5505 - Pages: 23

Premium Essay

Factors That Influence Senior School Students’perception of Biology in Ilorin-South, Kwara State by Salam, Wahab Adeiza 10/25pa044 a Project Submitted to the Department of Science Education, Faculty of Education,

...EDUCATION FACTORS THAT INFLUENCE SENIOR SCHOOL STUDENTS’ PERCEPTION OF BIOLOGY IN ILORIN-SOUTH, KWARA STATE (BSPQ) Dear Respondent, You are one of the students selected as participant for a research study conducted as part of my B.Sc(Ed) Science Education project at the department of science education, Faculty of Education, University of Ilorin, Ilorin, Nigeria. The study is titled: Factors that influence Senior School Students’ Perception of Biology in Ilorin, Kwara state. I wish to kindly request your cooperation to respond to the statements in the research instrument (Questionnaire). Your honest response will go a long way to achieve the goal of this study. Thanks for your anticipated cooperation. Yours sincerely, SALAM, Wahab Adeiza INSTRUCTION Please, read carefully and tick (√ ) appropriate response. SECTION A: Student’s Personal Information 1. Name of school……………………………………………... 2. School Type: Public( ) Private( ) 3. Gender of Respondent: Male ( ) Female ( ) 4. Class Level of Respondent: SS1 ( ) SS2 ( ) SS3 ( ) 5. Age of Respondent: 13-15 ( ) 16-18( ) SECTION B: Respond mode: SA= Strongly Agree A= Agree D= Disagree SD= Strongly Disagree S/N | Items on intrinsic motivation to learn Biology | SA | A | D | SD | 1 | I enjoy learning biology | | | | | 2 | The biology I learn is......

Words: 12738 - Pages: 51

Premium Essay

Islamic Financial System note that to prevent riba, the intermediary cannot be compensated in addition to the agreed upon terms of the contract. For this reason, if the buyer is late on their payments, the intermediary cannot charge any late penalties. * Ijarah Ijarah contract is almost similar to the leasing contract. It is a contract wherein the financier buys and leases equipment or other assets to the business owner for a fee or more often called rental income. The duration of the lease as well as the fee must be set in advance and mutually agreed. * Istisna Istisna is a sale transaction where a commodity is transacted before it comes into existence. It is an order to a manufacturer to manufacture a specific commodity for the purchaser. It differs from ijara in that the manufacturer must procure his own raw materials. Otherwise the contract would amount to a hiring of the seller's wage labour as occurs under ijara. * Salam This is an exception to gharar (gambling). The price for the item is prepaid and the item is delivered at a definite point in the future. Because there is a host of conditions to be met to render such contracts valid, the help of an Islamic legal advisor is usually required. * Mudarabah The Islamic bank pools investors' money and assumes a share of the profits and losses. This is agreed upon with the depositors. * Musharakah It is a contract in which a joint enterprise or partnership structure with profit/loss sharing......

Words: 6394 - Pages: 26

Free Essay


...Question No. 31): Interest rates are subject to unknown variations and linking the amount of rent with interest rate will create uncertainty (Gharar) impermissible in Shariah. How would the Ijarah contract remain valid under this scenario?............................................................................................................... 28 Question No.32). What is Ijarah-Wal-Iqtina? ........................................................................................... 29 Question No. 33) What is Bai Salam? ......................................................................................................... 29 Question No. 34) What is Istisna? .............................................................................................................. 31 Question No. 35) What is the difference between Istisna and Ijarah? .................................................... 32 Question No. 36): What is the difference between Istisna and Salam? ................................................. 32 Question No. 37) Is it permissible for an Islamic bank to impose penalty in case receivables are delayed? 32 Question No. 38) Can Islamic banks claim compensation or liquidated damages on account of late payment/default by the clients?.................................................................................................................. 33 Question No. 39) Islamic bank’s financing is sometime costlier than that of the......

Words: 17157 - Pages: 69

Premium Essay

Stryker Corporation

...of bondholders are sukuk is clearly different in this form interest-based bonds. Sukuk generally represent the ownership interest in assets that provide benefits or results of active enemy leased, commercial or industrial enterprises. This is one characteristics that differ sukuk from conventional bonds. However, the market has seen a number of sukuk where there is doubt about their representative property. As an example of possible sukuk assets in stocks of companies that do not provide ownership rights, but the only offer sukuk holder of the right of return. Sukuk are no more than the repurchase of shares and is not valid from the perspective of Islamic law. For example is the certain of sukuk that are based on mix between ijarah, istisna’ and murabahah contract that are undertaken by Islamic bank or institutions these are the packaged and sold to sukuk holders who hope to obtain the return from these operations. Regular distribution to sukuk holders Based on this, the majority of sukuk were issued is similar to conventional bonds, taking into account the distribution of profits as a percentage at fixed percentages on the interest rate (LIBOR). In order to justify the practice, issuers include in the contract clause stating that if the actual profits of the company for more than a percentage based on the interest rate, then the excess amount will be paid in full to mudarib or partner or investment agent as an incentive to mudarib to manage effectively. Sukuk......

Words: 3837 - Pages: 16

Premium Essay

Principles and Practices of Investment Modes of Islamic Banking meant for so. Since hoarding is condemned by Islam and a 2.5 percent annual tax (Zakat) is imposed on savings, the owner of a fund, if he is unable to make real investment, has no option but to invest his savings as a financial investment. Modes of investment followed by Islamic bank are exercised under three principles.   1. Bai-(Buy & Selling) Mechanism 2. Sharing (profit & Loss) Mechanism 3. Ownership Sharing Mechanism                 Modes of investment under three principles can be presented by using chart as follows -   Modes of Investment  |             Bai-Mechanism  | Sharing Mechanism | Ownership Mechanism | a. Bai-Murabah b. Bai-Muazzal c. Bai-Salam d. Bai-Istisna  | a. Mudarabah b. Musharaka | a. Hire purchase under Shirkatul Meelk |               5.6 Bai-Mechanism: 5.6.1 BAI – MURABAHA: Meaning: The terms ‘Bai – Murabaha’ have derived from Arabic words Bai and Ribhun. The word ‘Bai’ means purchase and sale and the word ‘Ribhun’ means an agreed upon profit. Bai – Murabaha means sale for an agreed upon profit.   Definition: Bai-Murabaha may be defined as a contract between a Buyer and a Seller under which the seller sells certain specific goods permissible under Islamic Shariah and the Law of the land to the Buyer at a cost plus agreed profit payable on cash or on any fixed future date in lump-sum or by installments. The profit marked-up may be fixed on......

Words: 25568 - Pages: 103

Free Essay


...the issuer and investor entered into at the first place. Sukuk Structures Murabahah (Mark-Up Sale) Sukuk Based on Shariah Contracts Sales-Based Istisna’ (Manufacturing Sale)   Most common sukuk classification is based on underlying Shariah contracts.   From Shariah perspective, there is no preference for the usage of one contract over the other. Salam (Forward Sale) Ijarah Muntahiah Bit Tamleek (Lease Ended With Transfer of Ownersip) Factors for considering a Sukuk structure:   Economic objectives of the Issuer. Lease Based Ijarah Mawsufah fi Dhimmah (Forward Lease)   Availability of assets.   Level of debt that the company has. Agency Based Wakalah lil Istihtmar (Agency for Investment) Mudharabah   Credit rating of the Issuer   Legal framework   Tax implication of a structure Partnership Musharakah Permissible Sukuk Structure AAOIFI   AAOIFI has specified several categories of permissible sukuk i.e. securitization of: No Securitization of/ Purpose Contract 1 Existing or to be acquired tangible asset Ijarah 2 Existing or to be acquired leasehold asset Ijarah 3 Presale of services Ijarah 4 To fund construction Istisna’ 5 Presale of the production of goods or commodities at a future date Salam 6 To fund the acquisition of goods for future sale Murabahah 7 To fund capital participation in a business or investment......

Words: 3463 - Pages: 14

Free Essay

Islamic Banking

...assets as a result of negligence on the part of the lessee. Istisna`a Istisna`a is a contract of exchange with deferred delivery, applied to specified made-to-order items. General agreement upon principles of practice is difficult to identify, however it is often stated that: I. The nature and quality of the item to be delivered must be specified. II. The manufacturer must make a commitment to produce the item as described. III. The delivery date is not fixed. The item is deliverable upon completion by the manufacturer.  IV. The contract is irrevocable after the commencement of manufacture except where delivered goods do not meet the contracted terms. V. Payment can be made in one lump sum or in instalments, and at any time up to or after the time of delivery. VI. The manufacturer is responsible for the sourcing of inputs to the production process. Istisna`a differs from ijara in that the manufacturer must procure his own raw materials. Otherwise the contract would amount to a hiring of the seller's wage labour as occurs under ijara. Istisna`a also differs from bay salam in that * the subject matter of the contract is always a made-to-order item, * the delivery date need not be fixed in advance, * full advance payment is not required and * The istisna`a contract can be canceled but only before the seller commences manufacture of the agreed item(s). Bay al-salam  Bay al-salam is a contract for deferred delivery that was......

Words: 2716 - Pages: 11

Premium Essay

Islamic Finance

...pçãÉ=_~ëáÅ=jáëí~âÉë=áå=jìê~Ä~Ü~Ü=cáå~åÅáåÖ= 3= 76 81 83 88 90 91 98 99 100 102 103 103 NMQ ÅçåíÉåíë= `çåÅäìëáçåë= NMS Ijarah _~ëáÅ=oìäÉë=çÑ=iÉ~ëáåÖ= iÉ~ëÉ=~ë=~=jçÇÉ=çÑ=cáå~åÅáåÖ= 1. The Commencement of Lease 2. Different Relations of the Parties 3. Expenses Consequent to Ownership 4. Liability of the Parties in Case of Loss to the Asset 5. Variable Rentals in Long Term Leases 6. Penalty for Late Payment of Rent 7. Termination of Lease 8. Insurance of the Assets 9. The Residual Value of the Leased Asset 10. Sub-Lease 11. Assigning of the Lease 109 NNN NNP 114 115 116 117 117 120 120 121 121 123 124 pÉÅìêáíáò~íáçå=çÑ=fà~ê~Ü= eÉ~ÇJiÉ~ëÉ= NOR NOS Salam and Istisna’ p~ä~ã= Conditions of Salam Salam as a Mode of Financing Some Rules of Parallel Salam Difference Between Istisna’ and Salam Difference Between Istisna’ and Ijarah Time of Delivery Istisna’ as a Mode of Financing 128 NOU 129 133 134 fëíáëå~Û= NPR 136 136 137 138 Islamic Investment Funds bèìáíó=cìåÇ= Conditions for Investment in Shares 140 NQN 143 fà~ê~Ü=cìåÇ= NQT 4 ÅçåíÉåíë= `çããçÇáíó=cìåÇ= Murabahah Fund Bai’-Al-Dain NQU 149 150 jáñÉÇ=cìåÇ= NRN The Principle of Limited Liability t~èÑ= _~áíìäJj~ä= gçáåí=píçÅâ= fåÜÉêáí~åÅÉ=ìåÇÉê=aÉÄí= qÜÉ=iáãáíÉÇ=iá~Äáäáíó=çÑ=íÜÉ=j~ëíÉê=çÑ=~=pä~îÉ= 152 NRQ NRR NRS NRT NRU The Performance of the Islamic Banks —A Realistic Evaluation 161 5= ‫ﺑﺴﻢ ﺍﷲ ﺍﻟﺮﲪﻦ ﺍﻟﺮﺣﻴﻢ‬ ‫ﺍﳊﻤﺪ ﷲ ﺭﺏ ﺍﻟﻌﺎﳌﲔ ،......

Words: 61209 - Pages: 245

Premium Essay

Guidelines for Conducting Islamic Banking the principles of Islamic Shariah and no part of the business either in form and substance has any elements not approved by Islamic Shariah. "Branch or Branch Office" means any branch or Branch Office of Islamic Bank Company or office or Branch of such interest based conventional Banks which run Islamic banking business. "Depositor" means some one who holds with any Islamic Banking Company any account namely Current account based on Al-Wadiah principles, Savings or long and short term deposit accounts under Mudaraba principles. "Investment" means any such modes of financing which Islamic Bank Company does in accordance with principles of Shariah or as per the Shariah approved modes like Mudaraba, Musharaka, Bai-Murabaha, Bai-Muajjal, Istisna, Lease, Hire-purchase under Shirkatul Melk, etc. "Client" means such a person or institution who/which has any business relationship with Islamic Banking Company. "Compensation" means such financial penalty as is imposed by a Islamic Banking Company over and above the amount of installment when a client fails to repay Bank's investment on due dates as per the agreement executed by him. b. c. d. e f. g. h. 2 Section II LICENSE A. Criteria for setting up full-fledged Islamic Bank. The following will be the broad criteria for consideration of setting up of the scheduled Islamic Commercial Bank: 1. The proposed bank company will be a public limited company and a minimum of 50% share shall be offered to the......

Words: 8568 - Pages: 35

Soporte Vertical para PS4/PS4 Slim/Pro Ventilador de refrigeración Cooling Stand | 斉木楠雄のΨ難_完結編 | C-A-- CAMP season 01 episode 23