Friday 11 November 2016

What is Bai Salam?


Salam means a contract or agreement in which advance payment is made for goods/commodities to be delivered at a future date. The seller undertakes to deliver some specific goods to the buyer at a future date in exchange of an advance price fully paid at the time of agreement. It is necessary that the quality of the commodity intended to be purchased is fully specified leaving no ambiguity leading to dispute. Bai Salam covers approximately everything which is capable of being definitely described as to quantity, quality and workmanship. For Islamic banks, this product is ideal for agriculture financing, however, this can also be used to finance the working capital needs of the customers or Agriculturist. 

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