Islamic Finance
Ribh
March 9, 2023
Islamic Finance
Ribh Ma Lam Yudman
March 9, 2023

A salam contract in which the seller (the short) or the buyer (the long) in the original (previous) salam becomes a buyer (long) or seller (short), respectively, in another contract which entails the delivery and taking delivery of the same underlying commodity (al-muslam fihi), without making the execution of the new salam contract dependent on the execution of the previous one. The reverse transacting is similar to offsetting in conventional finance transactions.

Reverse salam is also known as parallel salam or a back-to-back salam.

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