Istisna
A contract to manufacture or build a specified asset for delivery on a set date, with the price paid in stages or as a lump sum.
Istisna is the sale of an asset yet to be manufactured or constructed, which the seller undertakes to make from its own materials and deliver on a specific date for a specific price. The IFSB notes that the price may be paid in one lump sum or in instalments, which makes istisna suitable for construction and project finance. Unlike salam, the price does not have to be paid in full at signing, and banks often subcontract the work through a parallel istisna.
Sources
This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.
Related terms
SalamA forward sale: the full price is paid at signing for precisely specified goods to be delivered later.Ijarah mawsufah fi al-dhimmah (forward lease)A forward lease of an asset described by specifications, with use starting on a future date once it is delivered.IjarahA lease: the lessor owns the asset and sells its use for an agreed rent over an agreed period.