Filter by Categories
Accounting
Banking

Islamic Finance




Parallel Istisna’a


An istisna’a contract in which the buyer (manufacture orderer, or almustasni’) doesn’t set a condition in the contract obliging the seller (al-sani’) to undertake manufacturing the subject matter (commodity, asset, item, etc) by himself. In this sense, the seller is legally or contractually allowed to fulfill his contractual obligations by entering into a second istisna’a contract with a third party seller, in which he becomes a buyer. The second contract is referred to as parallel istisna’a. The paralleling practice is similar to offsetting in conventional finance transactions.

Parallel istisna’a is also known as back-to-back istisna’a.



ABC
The last three decades have witnessed the modern rebirth of Islamic finance both in terms of literature and practice. Islamic banks and ...
Watch on Youtube
Remember to read our privacy policy before submission of your comments or any suggestions. Please keep comments relevant, respectful, and as much concise as possible. By commenting you are required to follow our community guidelines.

Comments


    Leave Your Comment

    Your email address will not be published.*