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Types of al-Bay' (Bay' al-Tawarruq (Buying a commodity on differed…
Types of al-Bay'
Bay' al-Tawarruq
Buying a commodity on differed payment and selling it to a person other than the buyer for a lower price with immediate payment.
Example: The bank purchases commodity from a Trader A in the
commodity market on a cash basis. The bank then sells the commodity to the customer at a deferred price (cost price plus profit margin) payable in a lump sum or instalment basis. The customer may appoint the bank as his agent to sell the commodity to another Trader B on cash basis in the commodity market, and the bank then sells the commodity as agent of the customer to Trader B on a cash basis in the commodity market.
Bay' al-Wadiah
The seller resells the goods at a discount from the original cost at which the goods were obtained (below cost)
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Bay' al-Istijrar
An agreement between the client and the supplier, whereby the supplier agrees to supply a particular product on an ongoing basis, at an agreed price and method of payment.
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Bay' al-Murabahah
Sale of commodity whereby price have addition of the stated profit. The price is divided by seller or owner and be agreed (mutual) by buyer.
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Bay' al-Salam
An agreement whereby payment is made immediately while the goods are delivered at an agreed later date. Is is equivalent to an advance payment. The delivery of the goods is made in the future while the price needs to be settled on the spot.
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Bay' al-Istisna'
Sale in the way of ordering which means price is paid in advance but the assets are manufactured and delivered at a later specified time.