Islamic finance in Europe (44)

Continuation

The following contracts are also similar:

1. Bay ’al-mu’ajjal

This contract is instant sale of an asset in return for the payment of money at a future date. That kind of payments may be in full or by instalments.

2. Bay ’al-salam

This contract is deferred sale of an asset with an immediate payment of the price involved.

3. Bay ’al-istisna’

This contract is similar to the bay ‘al-salam contract, but involving a different object (industrial goods that have not yet been completed).

4. Commodity murabahah (or tawarruq)

This is the customer enters into a murabahah transaction with a bank, requesting it to purchase a particular commodity (e.g. metals).

From the research paper of European Central Bank

(Authors: F.Mauro, P.Caristi, S.Couderc, A.D.Maria, L.Ho, B.K.Grewal, S.Masciantonio, S. Ongena and S.Zaher)