Salam
A Salam is a Shariah-compliant forward sale contract in which the buyer (usually POICL-IFD) pays the full price in advance, and the seller delivers specified goods on a future date.
It is widely used for working capital financing, especially in agricultural products.
Core Shariah Requirements
- Full payment of the price must be made at the time of the contract.
- Subject matter must be clearly defined (quality, quantity, specifications).
- Goods must be standardizable and fungible (not unique or specific items).
- Delivery date and place must be clearly agreed upon.
- Contract must not involve interest (Riba) or excessive uncertainty (Gharar).
- Goods must be available in the market at the time of delivery.
- No partial or conditional delivery is allowed unless agreed in the contract terms.
