AlHuda Centre of Islamic Banking and Economics, www.alhudacibe.com,Presentaion by Alhuda CIBE ON MODARABA

16. Risks in Istisna applications and their solutions RISKS SOLUTIONS Ownership of Material The Islamic bank is not the owner of the materials in the possession of the manufacturer for the purpose of producing the asset. Security is available with the bank. Delivery Risk Islamic bank may be unable to complete the manufacturing of goods as scheduled due to late delivery of completed goods by the sub-contractor of Parallel Istisna. Bank can reduce the Istisna price acording to the Istisna agreement. Sale not permissible before delivery Sale of Istisna goods is not allowed before taking physical possession. Bank can take “promise to purchase” from the third party and can make arrangements for the “agency agreement”