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Bai ( Buying & Selling)

Presented by :

Zubair MughalCEOAlHuda: Centre of Islamic Banking & Economics

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Basic Rules of Bai

Existence of Product/Commodity

Ownership of Product/Commodity

Possession of Product/Commodity

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Basic Rules of Bai

Unconditional basis

Product have value/Price.

Bai on Such product which ispermissible in Islam.

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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.

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Bai (Buying & Selling)

Basic Kinds of Bai

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Kinds of Bai Bai Musawamah

Bai Murabaha

Bai Surf

Bai Salam

Bai Istisna Bai Urboon

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Basic Kinds of Bai Bai Eenna

Bai Touliya

Bai Wadhia

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BaiThere are three basic type of Bais which

are using in Islamic Banking as the

mode of financing in Pakistan

Murabahah

Salam

Istisna

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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 offinancing when client needs funds to

purchase any product/Machinery etc.

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Murabahah Sharing of Risk of loss differentiate

Murabahah from the interest category

Product Must be bought from thirdparty for avoid buy back transaction

Roll over is not Valid in Murabahah

If actual cost can not be identified thenMurabahah deal not possible.

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BaiImportant Note

Following 3 Basic Rules of Bai areexceptional for Salam & Istisna

Existence of Product/Commodity

Ownership of Product/Commodity

Possession of Product/Commodity

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Salam Pay 100% amount in Advance.

Product must be quantified, identifiedand Measured with quality.

Date of delivery, Time, Place must bementioned clearly in advance.

Salam is not valid for a specificfarm/land/garden.

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Istisna Not necessary to pay the 100% amount

in advance Like Bai salam.

Price must be decided on beginning ofthe contract.

Qualities, features of that product must

be clearly identified.

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Bai

Differences BetweenIstisna and Salam

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Differences Between Istisnaand Salam

Istisna deal with manufacturing items,but Salam could or could not be

manufacutred, but salam ideal ofagriculture sector.

In salam advance payment is

necessary, but in Istisna its not.

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Differences Between Istisnaand Salam

Date, time of delivery the necessarypart 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 startedyet.

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Type of Bai according to Quality

Bai Salah

Bai Fasid

Bai Batil

Bai Maqoof

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Type of Bai according to Quality

Bai Majool

Bai Muqayaddah

Bai Muajal

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Thank you