Salam is a contract where the Islamic bank is the buyer of the commodity and the farmer is the seller who undertakes to embark on future delivery.

Question

Quizplus · Accepted Answer

In a Salam contract, the Islamic bank (or financial institution) acts as the buyer, paying in advance for a specified commodity, while the seller (such as a farmer) commits to delivering the commodity at a future date. This arrangement allows the seller to obtain capital before production.

Salam Is a Contract Where the Islamic Bank Is the Buyer