PRESENTED TO:

MA’AM KALSOOM AKHTER

PRESENTED BY:
UMAIR ASLAM #136
M.USMAN #130
M. RAUF #116
DAUD-UL-HASSAN #136
M. WAQAR #140
ISTISNA
 It is an order to a manufacturer to manufacture a
specific commodity for the purchaser. The
manufacturer uses his own material to manufacture
the required goods.

 Price fixed with consent of all parties involved.

 All other necessary specifications of the commodity
must also be fully settled.
CONT..
 Applies on both Construction and manufacturing
 Parallel Istisna’a
A contract is allowed however performance of
second Istisna’a contract must be conditional on
the fulfillment of first contract.
 Not get due share in portfolio

 Help in reducing dependence

 In IFI portfolio Istisna’a shares only 3%

SHARI 'A RULINGS
 Rule 1
Contract is binding upon parties involved certain
conditions fulfilled (Subject matter, Price, date of
delivery)
 Rule 2
Contract is a sale contract with deferred delivery
of subject matter to buyer Hence all rules of valid
sale applied, expect subject matter, ownership
 Rule 3
cannot be executed with a costumer who is
purchaser from IFI
CONT..
 Rule 4
Istisna’a sale is allowed only for those
commodities where raw material is transformed
its natural shape.
 Rule 5
Istisna’a sale is applicable to both unique
commodities with specification generally
commodities, consumable goods,
 Rule 6
Istisna’a sale cannot be executed for a product
already manufactured and construction.
 Rule 7
It is not required that manufacturer produce the
subject matter by himself using his own facilities.
 Rule 8
Price can be made on spot, deferred, subject to
competition, stages, and parties agree.
 Rule 9
Urboun can be demanded and forfeited if contract
is rescinded equal amount is pref.
 Rule 10
It is permitted to change the price of contract due
to intervening contingencies.
 Rule 11
It is permitted to appoint the ultimate purchaser
as agent of IFI to ensure the construction as per
specification.
 Rule 12
Penalty clause can be stipulated for delay in
completion to compensate the purchaser, in
default payment not allowed.
 Rule 13
Manufacturer or builder can be appointed as
agent of IFI to dispose of commodity once the
possession of subject matter is taken over
 Rule 14
Selling of subject matter in Istisna’a before
taking the possession is not allowed, however IFI
enter in Parallel Istisna’a.
STEPS IN ISTISNA’A
 Bank enter into contract after signing 1st
transaction, then find contractors
 Bank provide finance and purchase the
production and then enter into parallel Istisna’a
(sell goods)
 Bank acquire production then appoint same
manufacture as agent to sale.
FINANCIAL IMPACT OF ISTISNA’A
 Little difference in balance sheet of conventional
and IFI ,accept deposit either as loan.
 Conventional bank lend money, while IFI not
lend but sale goods on credit, invest