Cycle	MCREDIT	SOP Reference	1
Function	SALAM	Version	1
Sub-Function	BASIC CONCEPT AND FEATURES	Date of Issue
		Approved by	Qazi Abdul Samad
Basic Concept
·    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.