Bai ( Buying & Selling)

Presented by :
Zubair Mughal
CEO AlHuda: Centre of Islamic Banking & Economics

Basic Rules of Bai

Existence of Product/Commodity

Ownership of Product/Commodity
Possession of Product/Commodity

Basic Rules of Bai

Unconditional basis

Product have value/Price.

Bai on Such product which is permissible in Islam.

Basic Rules of Bai

Product Must be Identify, clear with all demanding Qualities.

Not based on any incident, struggle etc

Price must be clearly identified.

Bai (Buying & Selling)

Basic Kinds of Bai

Kinds of Bai

Bai Bai Bai Bai Bai Bai

Musawamah Murabaha Surf Salam Istisna Urboon

Basic Kinds of Bai

Bai Eenna Bai Touliya Bai Wadhia

Bai
There are three basic type of Bais which are using in Islamic Banking as the mode of financing in Pakistan Murabahah Salam Istisna

Murabahah

Basically, its not a mode of financing but a source to avoid interest Dealing Its not a type of loan, but a deal (Bai) Murabahah can be used as source of financing when client needs funds to purchase any product/Machinery etc.

Murabahah

Sharing of Risk of loss differentiate Murabahah from the interest category Product Must be bought from third party for avoid buy back transaction Roll over is not Valid in Murabahah If actual cost can not be identified then Murabahah deal not possible.

Bai
Important Note Following 3 Basic Rules of Bai are exceptional for Salam & Istisna

Existence of Product/Commodity Ownership of Product/Commodity Possession of Product/Commodity

Salam

Pay 100% amount in Advance. Product must be quantified, identified and Measured with quality. Date of delivery, Time, Place must be mentioned clearly in advance. Salam is not valid for a specific farm/land/garden.

Istisna

Not necessary to pay the 100% amount in advance Like Bai salam. Price must be decided on beginning of the contract. Qualities, features of that product must be clearly identified.

Bai

Differences Between Istisna and Salam

Differences Between Istisna and Salam

Istisna deal with manufacturing items, but Salam could or could not be manufacutred, but salam ideal of agriculture sector. In salam advance payment is necessary, but in Istisna its not.

Differences Between Istisna and Salam

Date, time of delivery the necessary part of Bai Salam, But in Istisna, it is not the part of the deal. In Bai salam, it can be cancelled one sided, but in Istisna, it could be cancelled, if production is not started yet.

Type of Bai according to Quality

Bai Bai Bai Bai

Salah Fasid Batil Maqoof

Type of Bai according to Quality

Bai Majool Bai Muqayaddah Bai Muajal

Thank you