Two-tier ’istisna‘

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Dictionary term

Definition of "Two-tier ’istisna‘"

A sale agreement in which the prospective buyer asks the bank to manufacture a certain equipment with well defined specifications. The price in this first contract is deferred. The bank engages a specialized manufacturer to manufacture the equipment according to buyer’s required specifications. Payment of price to the manufacturer may be gradual, if he needs finance at the production stage.


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