Commenced in January 2007
Frequency: Monthly
Edition: International
Paper Count: 30750
Modeling Salam Contract for Profit and Loss Sharing

Authors: Dchieche Amina, Aboulaich Rajae


Profit and loss sharing suggests an equitable sharing of risks and profits between the parts involved in a financial transaction. Salam is a contract in which advance payment is made for goods to be delivered at a future date. The purpose of this work is to price a new contract for profit and loss sharing based on Salam contract, using Khiyar Al Ghabn which is an agreement of choice in case of misrepresent facts.

Keywords: Islamic Finance, Shariah Compliance, Derivatives, hedging, risks, salam contract, profit and loss sharing

Digital Object Identifier (DOI):

Procedia APA BibTeX Chicago EndNote Harvard JSON MLA RIS XML ISO 690 PDF Downloads 1125


[1] Aboulaich, Dchieche, ``Pricing of Waad Bil Mourabaha'', Asian journal of applied sciences, Vol 3, No 3, 2015.
[2] Aboulaich, Dchieche, ``Participating Contingent Premium Option'', Review of Pacific Basin Financial Markets and Policies, 2015.
[3] Ahmed, Abu Ghuddah, ``Shariah Opinion (Fatwa) On Istisna, Contracting & Salam'', Al-Baraka Banking Group Department of Research and Development, 2007.
[4] Ahmed, Fatwa No 7/2006, ``The basis on which it was based remove injustice in Salam'', Secretary General of the Supreme Commission for Sharia Of the banking system and financial institutions of the Republic of Sudan, 2006.
[5] Al-Suwailem, ``Hedging in Islamic Finance'', occasional paper N10, edited by IRTI, IDB, 2006.
[6] Al-Suwailem, ``Islamic approach to risk'', Adopted from sections 4 and 5 of the author's paper: Hedging in Islamic Finance, edited by IRTI, IDB, 2011.
[7] Al-Suwailem, ``Hedge controls on financial transactions'' (Arabic), Research presented to the Islamic Fiqh Academy, 21 session Saudi Arabia Riyadh, 2013.
[8] Al Zaabi, ``Salam Contract in Islamic Law: A Survey'', Review of Islamic Economics, Vol 14, No 2, 2010.
[9] Asif, ``Salam as a mode of financing'', Marshall Ketchum University, 2003.
[10] Bachelet, ``L'actualisation'', CentraleLile, 2014.
[11] Beng, Ming-Hua, ``Islamic banking: Interest-free or interest-based'', Pacific-Basin Finance Journal, Vol 17, No1 2009.
[12] Civil Transactions Law, ``Chapter V, Some types of sales, Salam'' (arabic), The Ministry of Justice of the Republic of Sudan, 1984.
[13] COMSATS Institute of Information Technology, ``Lecture 13: Salam & Istisna'', Monetary and Fiscal Framework in Islamic Finance, 2013.
[14] Council of the Islamic Fiqh Academy, ``third Resolution: dissolution of debt in religion'' (arabic), Eighteenth Session, 2006.
[15] El-Gamal, ``Islamic Finance: Law, Economics, and Practice'', page 81, Cambridge University Press, 2006.
[16] Emkay, Uitm, Khalid, ``Bay Al Salam'', University MARA of technology, 2012.
[17] Framework of Rate of Return, Central Bank of Malaysia, 2013
[18] Ghait, ``Theory decisive time and its impact on Islamic Economics'' (arabic), proposed plan for a doctoral degree in economics and Islamic banks Introduction to the Department of Economics and Islamic banks, College of Sharia and Islamic Studies Islamic economy and banking department, Yarmouk University, 2005.
[19] Jabr, ``Operations and accounting treatment on Salam contract'' (arabic), Forum Khartoum of financial industry, sixth edition, 2014.
[20] Kat, ``Contingent Premium Option'', The Journal of deratives 1994.
[21] Klein, Les Sukuk optionnels, Sukuk A remboursement anticipe, convertibles et echangeables, les cahiers de la Finance Islamique No7, 2014.
[22] Martens, ``La Finance Islamique: Fondements, theorie et realite'', l'actualite economique, Vol 77, No 4, 2001.
[23] Omar, Arifin, Mohdnapiah, Abdullah, ``The Implications of Ghubn in Islamic Contracts: An Analysis Of Current Practices'', Journal of Applied Sciences Research, Vol 7, No 13, 2011.
[24] Obaidullah, ``Financial Engineering with Islamic Option'', 1998.
[25] Redha, ``The concept of time in Islamic Economics''(Arabic), Research paper N10, edited by IRTI, IDB, 2000.
[26] Said, Ahmad, Javaid, ``Handbook on Islamic SME Financing'', Islamic Banking Department State Bank of Pakistan, 2007.
[27] Sayyid, ``Alternative Structures for Financing by Islamic Banks'', IRTI Working Paper Series, 2013.
[28] Shehata, ``Foundations and accounting systems on the sale of Salam and parallel peace as in Islamic banks'' (arabic), A series of studies and research In Islamic accounting thought, 2007.
[29] Tijani, ``Salam legitimate alternative to bank financing contemporary (Financial and investment look)'' (arabic), Version II, The initial edition, The Ministry of Finance and National Economy Supreme Advisory Committee of government instruments, the Republic of Sudan, 2006.
[30] Umar, ``shariah economic and accounting framework of bay al Salam in the light of contemporary application'', Research paper N33, edited by IRTI, IDB, 2006.