BokInfo
Monday, 23 February 2015
Tuesday, 17 February 2015
SALAM-Procedure
5. Selling of goods
It is impermissible for the buyer of goods on Salam basis to sell these before actually receiving the
same, particularly in case of grains and edible items as it
has been explicitly prohibited in a Hadith.
Ø
SALAM
AGREEMENT
In case of other than grains and edible items, a few jurists allow to sell the same. However,
as a general rule these still
should be avoided.The goods sold on Salam basis are considered a liability debt in form of goods (i.e. in exact quantity
and quality of the
goods agreed) and not in form of cash (i.e. the cash
value of such goods).
The seller is obliged to deliver the same when
it
is due, according to the specifications stipulated
in the contract. In case, due to any reason he could not produce or grow the same, he shall buy the
same from market
and deliver to the buyer
instead of
returning the
advance money.
6.Buy-back transaction
Salam sale should not be accompanied with a buy-back transaction i.e. the goods purchased on Salam should not be
sold
back
to the same customer,
either under a contract, or under
a business norm. It is not permissible to link the obligations under the two Salam contracts together such that
the execution of the
obligations of
one contract
is
contingent on the
outcome of
the other.
7.Delay in the delivery of goods
7.Delay in the delivery of goods
No additional
amount
can be charged or levied on the seller if he delays in the delivery of goods. However, in such case, the sale may
be cancelled and the advance amount shall be returned to
the buyer.
8.Documentation of Salam
8.Documentation of Salam
In Islamic Shariah permissibility of any financial transaction is dependent on the fact that whether
or not the clauses of the agreement conform to the principles defined in Shariah. The bank’s Salam
Agreement and other related
Appendixes have been
approved by the bank’s Shariah Supervisory Committee
/ Shariah
Advisor, which
are as under:
This Agreement sets out the terms and conditions upon and subject to which the bank has agreed to
have the Specified subject to
all terms and conditions of the
agreement.
Ø
AGENCY AGREEMENT
A commercial bank has a
diverse range of customers and bank does not possess the expertise of
dealing in such a wide range of commodities. For this purpose Agency
Agreement is executed between
the customer
and the bank to sell the Salam assets.
Friday, 6 February 2015
The Bank Of Khyber_SALAM
Essential Features
1.Goods specifications
In a
Salam
sale, the goods
shall be
defined with due specifications making
it clear and understandable
and their description shall not
be left to be decided
on some
future date.
Goods quantity and quality both should be measurable or may be adequately estimated. It
shall be conducted
in only
such goods or
commodities, each unit of which have similar
characteristics e.g.
grains of a particular type etc. These types of commodities are called Zawat-ul-Amthal (homogenous goods).
The date of delivery of goods should be fixed and preferably the place of delivery should also be fixed.The commodity for Salam contract shall be expected to be in market and should further be expected to be in possession of the seller on the agreed date of delivery.
Any decline or increase in the market price at the time of delivery of goods might result in a loss or gain. Such loss or gain pertains to the buyer and seller both, the seller and the buyer, have no recourse on sale.
Payment against
Salam purchase must be fully advanced at the time of commencement of
Salam transaction.
Salam transaction is irrevocable by either party. However, in
case the goods do not match
with
the agreed description or
if
some defects are
found
such transaction may be
reversed.In case of identification of inferior quality of goods at the time of delivery, price may be changed/agreed with
mutual consent.
4.Cancellation of Salam Contract.
It is permissible, when both parties agree due to any practical impediment, to cancel the entire Salam contract in return for repayment in full of the amount of the purchase price advanced earlier at the time of commencement of contract. Partial cancellation, that is, cancellation of the delivery of
part of goods, in return for repayment of a corresponding part of the purchase price, is also permissible.
However, the contract cannot
be cancelled unilaterally.
Thursday, 5 February 2015
Cycle
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MCREDIT
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SOP Reference
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1
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Function
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SALAM
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Version
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1
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Sub-Function
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BASIC CONCEPT AND
FEATURES
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Date of Issue
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Approved by
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Qazi Abdul Samad
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Basic Concept
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· Salam sale refers to advance payment for goods which are to be delivered later.
The seller undertakes to
deliver goods to
the buyer at a later date in exchange of an advance payment.
· One of the basic conditions for the validation of a sale transaction in Shariah is that the
commodity (intended to be sold) must be in the physical or constructive possession
of the seller. Salam sale is an exclusion from this general
rule
subject
to certain specific provision.
· In Salam sale, the
seller
obtains advance payment against
an
obligation to deliver
the commodity
later and accordingly, he gets the benefits through covering
his financial needs
whether these are personal expenses or expenses for productive or trading
activity. On the
contrary, the purchaser gets
the discounted
prices
for
the commodity and gets
the commodity according to
the
time of his desire.
· Salam is beneficial to the seller
as well as buyer,
as one receives the price in advance a nd
other is charged lower
than spot sale
price.
· Salam
sale is suitable for
a
number of trading
and business
operations including
as
an
alternate to traditional
finance of agricultural
operation.
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