← Interest Free Banking Financing: Practitioner

Bai' Salam and Istisna'

Module 02 / 9 · 60 min

Use forward sale (Bai' Salam) for crops and goods delivered later, and Istisna' for assets made or built to order, each with an independent parallel contract.

In this module you will learn to

State the conditions of a valid Bai' Salam, including full payment at signing and exact description of the goods
Structure a parallel Salam that is separate from, and independent of, the first Salam
Structure an Istisna' and a parallel Istisna' with progress payments tied to inspected work
Set the payment triggers and controls for a coffee Salam and a building Istisna'

Built on

Erudite Africa training outline: Interest Free Banking Financing, Three-Level Course, Level 2 Practitioner (October 2026)
A typical Ethiopian bank's IFB financing business procedure (May 2025), unnamed: definitions, governance, roles, modes, products, processing, pricing, collateral and disbursement
AAOIFI Sharia'h Standards, including No. 8 Murabaha, No. 9 Ijarah, No. 10 Salam and No. 11 Istisna'; the host bank's Sharia'h Advisory Committee rulings take precedence in that bank
NBE Directive No. SBB/72/2019, Licensing and Authorization of Interest Free Banking Business; Directive No. SBB/91/2024, Bank Corporate Governance; Directive No. NBE/INT/13/2026, Interest Rates (As Amended)
NBE Foreign Exchange Directive No. FXD/01/2024 as amended, including Directive No. FXD/05/2026

Examples and companies are fictional. Bank practices are shown as typical Ethiopian practice, not as any one bank's policy. Always apply your own institution's approved policy and the current NBE directives.