Bay' Al-Salam and Istithna' : Implementation and Challenges
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Product SKU 978967418465
Size (L x W x H) 31 cm x 22 cm x 3 cm
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Authors : Azhar Mohamad, Imtiaz Mohammad Sifat, Anisza Hasmawati & Mo'min S.M. Qatei

ISBN : 978967418465

Publisher : IIUM Press

Year : 2018

Pages : 176

Bay’ al-Salam is a contract where the buyer pays in advance but the underlying commodities are delivered on a deferred basis. Istithna’ is a special kind of sales contract where the sale of a commodity is transacted before the commodity comes into existence. The both contracts are generally acceptable among scholars of Fiqh, though many jurists stipulated certain conditions regarding the price of Bay’ al-Salam and the object of Bay’ al-Salam in order to differentiate between Bay’ al-Salam and the sale of a non-existent item. In a sense, this contract is viewed a Rukhsah (special dispensation) for the ummah to meet their needs.  Despite the clear attractive features of Bay’ al-Salam and Istithna’, Malaysian Islamic financial institution (IFIs) are hesitant to utilise Bay’ al-Salam contracts mainly citing counterparty risk, price risk and market risk.  In this book “Bay’ al-Salam and Istithna’: Applications, Risks, and Related Issues from the Malaysian Perspective”, Associate Professor Dr Azhar Mohamad invited fellow co-authors: Imtiaz Mohammad Sifat, Anisza Hasmawati and Mo’min S.M. Qatei to interview Malaysian IFIs to find answers to several burning questions regarding the prospects, dimensions, applications and challenges of Bay’ al-Salam in general and specifically in Malaysia. We found that most Malaysian IFIs do not have any interest in implementing the both contracts due to the perceived inherent risks. There should be a concerted movement involving all bodies in Malaysia; BNM, Islamic financial Institutions (IFIs), as well as agriculture agencies, to work together in order to apply Bay’ al-Salam and Istithna’ in Malaysia. It is hoped that, with this discussion on Bay’ al-Salam and the application of Istithna’ financing in Malaysia, our society will be able to provide more answers to the basic question in the economy of how to help the poor and needy.