bai al-bithaman ajil The sale of goods on a deferred payment basis whose price includes a profit margin agreed by both parties. Similar to a murabahah contract, but that the buyer makes only a single instalment on the loan’s maturity date. Islamic banks collect the market rate of interest by the application of a discount rate.bai al-dayn A short-term facility that provides the finance required for production, commerce and services through the sale and purchase of the relevant trade documents and papers.
These contracts have a maturity of not more than twelve months. Care must be taken when setting up such a contract that the documentation traded is from genuine commercial transactions.bai al-‘inah, bai inah Literally, a ‘sale and buy-back agreement’, where the financier sells an asset to the customer on a deferred-payment basis and then straight away the financier repurchases the asset back for cash at a reduced price. This activity allows the bank to take de facto ownership of the asset, thus technically protecting it against default and removing the need for charging for late payments or bankruptcy. The scholars deemed this illegitimate unless the buyer is given the option of selling the assets back at a lower price, rather than the obligation.bai al salam, bay salaam An exceptional contract of sale where an immediate payment of the price is made and a delay exists in the delivery of the goods.
bai al-wafa’ Literally, ‘a sale of honour’, but in this context a sale where the right of redemption is reserved. A bai al-wafa’ takes place when the commodity is sold with the understanding that the seller is permitted to redeem the commodity upon completion of the payment and the buyer agrees as per the contract to honour this arrangement.bai inah (alt.
sp. of bai al-‘inah) A sale and buy-back agreement, where the asset is sold on a deferred payment basis and then repurchases it straight away.