Table IV. Bayʿ and salaf in tawarruq... | Emerald Publishing

Table IV.

Bayʿ and salaf in tawarruq-based deposit/placement structures

Contract	Explanation
Salaf	Step 1 The customer places money with the bank. In most cases, the purchase of commodity will only take place on the next business day. Thus, the money will be held by the bank on a qarḍ basis and will thus be used by the bank for its usual banking business. Relationship between bank and customer in salaf Bank: Borrower Customer: Lender
Bayʿ	Step 3 The customer then sells that commodity to the bank at a selling price comprising cost-plus-profit to be paid by the bank at a later date, which is at the end of the agreed tenure. Relationship between the bank and customer in bayʿ Bank: Buyer Customer: Seller

Contract	Explanation
Salaf	Step 1The customer places money with the bank.In most cases, the purchase of commodity will only take place on the next business day. Thus, the money will be held by the bank on a qarḍ basis and will thus be used by the bank for its usual banking business.Relationship between bank and customer in salafBank: BorrowerCustomer: Lender
Bayʿ	Step 3The customer then sells that commodity to the bank at a selling price comprising cost-plus-profit to be paid by the bank at a later date, which is at the end of the agreed tenure.Relationship between the bank and customer in bayʿBank: BuyerCustomer: Seller

Source: Authors’ own