|
Bai-Salam |
|
Bai-Salam is a
contract between a buyer & a seller under which the
seller sells in advance the certain
commodities/products permissible under Islamic Shariah
and the Law of the land, to the buyer at an agreed
price payable on execution of the said contract and
the commodities/products are delivered as per
specification, size, quality, quantity at a future
time in a particular place.
In other words,
Bai-Salam is a sale whereby the seller undertakes to
supply some specific commodities/products to the buyer
at a future time in exchange of an advanced price
fully paid on the spot. ‘Price is paid in cash and
delivery of the goods is deferred.’ |
|
|
|
Important features |
|
01. |
A commodity/product sold
without having the same in existence or possession of
the seller. Commodity ready for sale, Bai-Salam is not
allowed in Shariah. |
|
02. |
Generally used to infuse
finance so that production is not hindered due to
shortage of fund/cash and as such. Industrial and
agricultural products are purchased/sold in advance
under Bai-Salam. |
|
03. |
Permissible to obtain
collateral security from the seller to secure the
investment from any hazards (non supply, partial
supply, low quality). |
|
04. |
Permissible to obtain
Mortgage or personal guarantee from a third party
before or at the time of signing the agreement. |
|
05. |
Bai-Salam on a particular
commodity/product or on a product of a particular
field or farm can not be effected (Agri. product
only). |
|
06. |
The seller (manufacturer)
client may be made agent of the bank to sell the goods
delivered to the bank by him and a separate agency
agreement is to be executed between the bank and the
client (Agent). |
|
|
|
Rules
and Conditions for Bai-Salam |
|
01. |
There must be a contract which will be
the principal instrument to govern the advance selling and buying.
The agreement should be signed before two witnesses (Surah
Al-Baqarah-282). |
|
02. |
Name, specification, brand, quality, quantity, size etc. of the goods
must be specified clearly without any ambiguity. |
|
03. |
Unit
price and total price of the commodity must be fixed and mentioned. |
|
04. |
Exact time and place of delivery must be specified. |
|
05. |
Mode
of transportation, cost, and other charge, if any, must be specified. |
|
06. |
The
name of party who will bear those costs to be mentioned. |
|
07. |
Price shall be paid to the seller in full at the time of signing the
contract. |
|
08. |
Delivery of the commodity/product can be made / taken in installment
or at a time within the contract period if mentioned in the
contract. |
|
09. |
Quantity of the commodity/product shall be in unequivocal terms.
Quantified in weight/number/pieces must be determined. |
|
10. |
The
supplier (client) is bound to repay the price so received in advance
if failed to deliver the goods as per specification and also the value
of less supplied. |
|
11. |
Only
purchase price of the commodity/product may be mentioned. |
|
12. |
Buyer Bank shall bear the risk until dispose/delivery of the same to
the ultimate buyer. |
|
13. |
The
seller shall remain responsible for maintaining quality, quantity,
specification of the commodities/products until making
physical/constructive delivery of the same to the buyer. |
|
14. |
Bai-Salam is impermissible on land lots and real estates. |
|
15. |
It
is impermissible for the buyer of a salam commodity to sell the
commodity before receiving of it. |
|
|
