The term "Bai-Istijrar" has been derived from Arabic words بيع and جر (Bai and Zarra). The word بيع means to purchase and to sell and the word جر means to hoist, to lift up, pick up, bring up. "Istijrar" (استجرار ) means to purchase goods from time to time in different quantities. In Islamic jurisprudence ‘Istijrar’ is an agreement where a buyer purchases something under a single agreement in different instalments. However, no offer and acceptance or bargain is required each time. The deal will be considered as a single agreement where all terms and conditions are finalized.
"Bai-Istijrar" is called such a buying and selling where a person keeps on taking delivery of required commodities part by part from time to time from a supplier and no offer(Ijaab) & acceptance (Qobul) and bargaining between them is taken place each time of making and taking delivery.
- In the case where the seller discloses the price of goods at the time of each deal/transaction the sale becomes valid only when the buyer takes possession of the goods. The amount is paid after all transactions have been completed.
- If the seller does not disclose each and every time to the buyer the price of the subject matter, but the parties concerned know that it is being sold on market value and the market value is specified and determined in such a manner that it does not vary and it does not lead to differences of the parties.
- If at the time of taking possession, the price of the subject matter is unknown or the parties agree that whatever the price shall be, the sale will be executed. However, if there is any difference with the market price, the sale will not be valid until settlement of the payment is made. After the payment of price the buyer's usage of the subject matter will be valid from the time of taking the possession.
- The Bank enters into agreement separately with the suppliers and the clients to purchase and sell the goods/commodities at predetermined/agreed price on the basis of Istijrar.
- The supply and delivery will be made in phases with in the specified time period.
- It is permissible to take cash/collateral security from the client to guarantee the implementation of the promise/agreement or to indemnify the damages.
- It is also permissible to obtain mortgage/guarantee/cash security to secure the investment under Istijrar.
- Availability of the goods as per specification of the client is a basic condition for signing an agreement under Istijrar.
- The Bank or the suppliers as per order of the Bank shall deliver the specified goods to the Client within the stipulated period and at a specified place as per Contract.
- The Bank shall sell the goods at a higher price (Cost + Profit) to earn profit. The cost of goods sold and profit agreed upon therewith shall separately and clearly be mentioned in the Bai-Istijrar Agreement. The profit agreed upon may be mentioned in lump sum or in percentage of the purchase/cost price of the goods. But, under no circumstances, the percentage of the profit shall have any relation with time or expressed in relation with time, such as, per month, per annum etc.
- The price once fixed as per agreement and deferred cannot be increased further.
- It is permissible for the Bank to authorise any third party to buy and receive the goods on Bank's behalf. The authorisation must be under separate contract
Area of Application
- In case of establishing physical ownership of the Bank on the goods/commodities to be sold under Bai-Murabaha is difficult due to some reasons, such as, arrival of goods at the destination at late night, location of the Branch is far away from the station of goods/commodities etc., but the same is possible in constructive form by other means (e.g. acquiring ownership by purchasing the goods over telephone or accepting valid quotation), the Bank may exercise Istijrar with both of the Bank’s supplier and Client.
- In case of purchasing the goods/commodities in numerous deals from a single/few supplier(s), the Bank may exercise Istijrar with the supplier.
- In case of selling the goods/commodities under Bai-Murabaha by purchasing through Letter of Authority against the dealership, the Bank may exercise Istijrar with the supplier.
- In case purchased goods are delivered in instalments and payment is made after completion of supplies, the Bank may exercise Istijrar with the supplier.
- In case of selling the goods/commodities in numerous deals to a particular client, the Bank may exercise Istijrar with the client.
- In case of selling the goods/commodities under Bai-Murabaha by purchasing through Letter of Authority against the dealership to a particular client, the Bank may exercise Istijrar with the client.
- In case of availing investment in single deal/payment of the price after completing the supplies against purchasing goods/commodities in numerous instalments by a particular client the Bank may exercise Istijrar with the client.
For more information please contact to your nearest branch.