Al Bai / Tijarah
Al-Bai linguistically means "the sale" and refers to any Shariah-compliant contract in which ownership of a tangible asset or commodity is transferred from a seller to a buyer for a known price.
Al Bai is a Shariah-compliant financing product in which the institution purchases commodities from the customer and appoints the customer as its agent to sell them in the market, thereby enabling liquidity generation through genuine trade transactions.
All Al-Bai contracts must adhere to the following Shariah principles:
- The asset must exist, be owned, and be in the seller's possession at the time of sale.
- The price must be fixed, known, and agreed upon by both parties.
- The asset must be Halal (permissible) in nature and use.
- The contract must be free from Riba, Gharar (excessive uncertainty), and Maysir (gambling).
- POICL-IFD bears the risk of the asset purchased until it is sold into the market.
