Istisna is generally a long-term sales contract between a customer and the bank, whereby Dubai Islamic Bank agrees to construct and deliver an asset at a pre-determined future time, at an agreed price. The bank takes care of paying the contracted developer or builder in full or at specific stages of project completion.
What is istisna in Islam?
Related Content. An Islamic finance technique used to finance the construction or manufacture of assets on terms compliant with Sharia. In an istisna’a transaction, a lender agrees to buy an asset to be delivered once construction or manufacturing of that asset is complete.
What does istisna meaning?
Istisna means a contractual agreement for manufacturing goods and commodities, allowing cash payment in advance and future delivery or a future payment and future delivery.
What is istisna example?
Istisna is a type of sale transaction where the buyer places an order with the seller to manufacture certain asset and the sale is completed upon delivery of the asset to the buyer. Istisna is used for providing financing facility for transactions where customer is involved in manufacturing or construction.
What is Salam and istisna?
The contracts of salaam and istisna are sale-based contracts between two or more parties that involve the sale of an asset that does not exist at the time the contract is negotiated.
Why is istisna important?
The importance of Istisna’a is a contract stems from that it has great facilitation for dealers; It covers two important aspects: the contract of delivery, which does not require the existence of the goods that must be delivered, but the price must be delivered when contracting according to the view of the majority of
Where is istisna applicable?
Istisna is widely used by Islamic banks and financial institutions to finance the construction of real estate such as buildings, warehouses, showrooms, shopping malls, residential towers and villas, as well as manufacturing activities involved in the construction of like aircrafts, ships, machines and equipment, etc.
What is istisna sale?
Istisna’a is a contract between a manufacturer/seller and a buyer under which the manufacturer/seller sells specific product(s) after having manufactured, permissible under Islamic Shariah and Law of the Country after having manufactured at an agreed price payable in advance or by instalments within a fixed period or
What is istisna Sukuk?
Category — Islamic Finance. Istisna Sukuk is based on Istisna contracts, they are instruments issued by the manufacturer of a commodity in order to obtain the value of the instruments and then produce the agreed commodity and deliver it to the Sukuk holders at the agreed time.