---
title: "What is Parallel istisna? | IslamicOpenFinance™"
description: "A second, independent istisna in which a bank that has agreed to deliver an asset orders it from a manufacturer or contractor."
url: https://islamicopenfinance.com/glossary/parallel-istisna/
lang: en-GB
source: "IslamicOpenFinance"
---

[Glossary](https://islamicopenfinance.com/glossary/) / [Sale-based contracts](https://islamicopenfinance.com/glossary/#sales)

Sale-based contracts

# Parallel istisna

A second, independent istisna in which a bank that has agreed to deliver an asset orders it from a manufacturer or contractor.

Parallel istisna is a second istisna contract that a bank concludes, as buyer, with a manufacturer or contractor to obtain an asset it has agreed to deliver, as seller, under a first istisna with its customer. AAOIFI's istisna standard covers both contracts, and Bank Negara Malaysia's istisna policy document treats the parallel arrangement as permissible on condition that each contract stands on its own. The bank stays liable to its customer even if the contractor fails, so the two contracts need separate obligations, timelines and records.

## Sources

- [Bank Negara Malaysia, Istisna\` policy document, 2015: arrangement of parallel istisna\`](https://www.bnm.gov.my/documents/20124/938039/Istisna_PD_29122015.pdf)

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

[**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.](https://islamicopenfinance.com/glossary/istisna/) [**Parallel salam** A separate, independent salam with a third party that lets a party to a first salam offset its position in the same goods.](https://islamicopenfinance.com/glossary/parallel-salam/) [**Sukuk al-istisna** Certificates that fund the manufacture or construction of an asset, which then belongs to the holders.](https://islamicopenfinance.com/glossary/sukuk-al-istisna/) [**Dhimmah (legal capacity for obligations)** The legal capacity in which rights and obligations are held, so that a debt can sit in a person's liability rather than in a specific asset.](https://islamicopenfinance.com/glossary/dhimmah/)

**Sale-based contracts**

1. [Murabaha](https://islamicopenfinance.com/glossary/murabaha/)
2. [Musawamah](https://islamicopenfinance.com/glossary/musawamah/)
3. [Bay al-muajjal (deferred-payment sale)](https://islamicopenfinance.com/glossary/bay-muajjal/)
4. [Salam](https://islamicopenfinance.com/glossary/salam/)
5. [Istisna](https://islamicopenfinance.com/glossary/istisna/)
6. [Tawarruq](https://islamicopenfinance.com/glossary/tawarruq/)
7. [Bay al-sarf (currency exchange)](https://islamicopenfinance.com/glossary/bay-al-sarf/)
8. [Murabaha to the purchase orderer](https://islamicopenfinance.com/glossary/murabaha-purchase-orderer/)

[All 221 terms](https://islamicopenfinance.com/glossary/)