Editing Islamic banking and finance (section)

==== Istisna and Bai Salam====
''Istisna'' (also ''Bia Istisna'' or ''Bai' Al-Istisna'') and ''Bia Salam'' (also ''Bai us salam'' or just ''salam'') are "[[forward contract]]s"<ref>{{cite web |title= Islamic Finance: Types of Contracts |date=18 January 2015 |url=https://rifqilazio.wordpress.com/2015/01/18/islamic-finance-types-of-contracts/ |access-date=30 August 2017 }}</ref> – customized contracts where immediate payment is made for goods in the future – goods not yet manufactured, built, or harvested.<ref name="IIFTU1998:136">[[#IIFTU1998|Usmani, ''Introduction to Islamic Finance'', 1998]]: p.136</ref><ref name="Investopedia">{{cite web|title=Forward Contract|url=http://www.investopedia.com/terms/f/forwardcontract.asp|website=Investopedia|access-date=31 August 2017}}</ref><ref name="review"/>
''Istisna'' contracts (literally, a request to manufacture something) are limited by Islamic fiqh to use for manufacturing, processing, or construction, and may be applied in these regards within the sphere of supply chain management,<ref name=IIFTU1998:136/><ref name="review">{{cite journal|last1=El-Gamal|first1=Mahmoud|title=Letter by Mahmoud El-Gamal following A Review of Forward, Futures and Options From the Islamic Perspective. From Complexity to Simplicity. |url=https://www.academia.edu/2070625 |journal=Seminar Ekonomi & Kewangan Islam (Seki) Conference, August 29–30, 2005 |access-date=31 August 2017}}</ref><ref>{{Cite journal |last=El Daouk |first=Mohamad |date=2022-01-01 |title=Introducing ḥalāl to construction supply chains in the UK's construction sector |url=https://doi.org/10.1108/JIMA-01-2022-0016 |journal=Journal of Islamic Marketing |volume=14 |issue=10 |pages=2385–2403 |doi=10.1108/JIMA-01-2022-0016 |s2cid=252059540 |issn=1759-0833}}</ref> while salam "can be effected on anything"<ref name=IIFTU1998:136/><ref name="ib">{{cite web |url=https://www.islamicbanker.com/education/istisna-vs-salam |title=Istisna vs. Salam |website=Islamic Banker |access-date=22 September 2017 |archive-date=18 January 2018 |archive-url=https://web.archive.org/web/20180118122626/https://islamicbanker.com/education/istisna-vs-salam |url-status=dead }}</ref> — except gold, silver, or currencies based on these metals.<ref name="Kettell-2011-155">{{cite book|last1=Kettell|first1=Brian|title=Introduction to Islamic Banking and Finance|date=2011|publisher=John Wiley & Sons.|page=[https://archive.org/details/introductiontois0000kett/page/155 155]|url=https://archive.org/details/introductiontois0000kett|url-access=registration|quote=salam cannot be gold silver.|access-date=29 March 2017|isbn=9781119990604}}</ref> 
On the other hand, a salam contract cannot be cancelled unilaterally,<ref name=IIFTU1998:136/> the full price must be paid in advance,<ref name=IIFTU1998:136/><ref name="FJIFD2012:162">[[#FJIFD2012|Jamaldeen, ''Islamic Finance For Dummies'', 2012]]:162</ref> and the time of delivery must be specified<ref name=IIFTU1998:136/><ref name="FJIFD2012:162"/> – restrictions that do not apply to ''istisna''.

In a ''istisna'' contract, the financer/bank can makes payments in stages, to finance raw materials (in the case of manufacturing), or construction materials (in the case of the construction project).<ref name="Sapovadia-234">{{cite book|last1=Sapovadia|first1=Vrajlala|title=Developing Africa's Financial Services: The Importance of High-Impact ...|date=2017|publisher=Emerald Group Publishing|isbn=978-1-78714-187-2|page=234|chapter-url=https://books.google.com/books?id=0DrTDgAAQBAJ&q=istisna+help+manufacturers+pay+for+an+order+of+raw+materials&pg=PA243|access-date=31 August 2017|chapter=Appendix F}}</ref> When the product/structure is finished and sold, the bank can be repaid.

''Bia salam'' and ''istisna'' contracts should be as detailed as possible to avoid uncertainty.<ref name="FJIFD2012:159">[[#FJIFD2012|Jamaldeen, ''Islamic Finance For Dummies'', 2012]]:159</ref><ref name="FJIFD2012:162"/><ref name="RATMTRIBP2014:64">Turk, ''Main Types and Risks'', 2014: p.64</ref><ref name="IIFTU1998:128">[[#IIFTU1998|Usmani, ''Introduction to Islamic Finance'', 1998]]: p.128</ref> 
''Salam'' contracts predate ''istisna''<ref name="MeGIFLEP2006:81">[[#MeGIFLEP2006|El-Gamal, ''Islamic Finance'', 2006]]: p.81</ref> and were designed to fulfill the needs of small farmers and traders.<ref name="IIFTU1998:133">[[#IIFTU1998|Usmani, ''Introduction to Islamic Finance'', 1998]]: p.133</ref><ref name="Kettell-2011-155"/><ref name="FJIFD2012:161">[[#FJIFD2012|Jamaldeen, ''Islamic Finance For Dummies'', 2012]]:161</ref> Salam is a preferred financing structure and carries higher order of ''[[Shariah]]'' compliance than contracts such as ''Murabahah'' or ''Musawamah''.<ref name="IIFTU1998:130">[[#IIFTU1998|Usmani, ''Introduction to Islamic Finance'', 1998]]: p.130</ref>

Examples of use of ''istisna'' in the Islamic finance world include use by the Kuwait Finance House<ref name="FJIFD2012:158"/> and the Barzan gas project in Qatar.<ref name="Meshari-2013">{{cite web |last1=Meshari |first1=Ahmad |title=Qatar Islamic Bank: Setting the benchmark for Islamic banking |url=http://www.worldfinance.com/banking/setting-the-benchmark-for-islamic-banking |website=worldfinance.com |access-date=9 April 2017 |archive-date=14 September 2017 |archive-url=https://web.archive.org/web/20170914125913/https://www.worldfinance.com/banking/setting-the-benchmark-for-islamic-banking |url-status=dead }}</ref> Examples of banks using ''Salam'' are ADCB Islamic Banking and Dubai Islamic Bank.<ref name="FJIFD2012:162"/>