Conclusion & Recommendations of Sharia and Legal Issues in Salam Contract Bank

        If all the above discussion is summarized than it is evident that there are Shariah and legal issues which occur in Salam Contract. The rules & regulations in various jurisprudences show variations.  The Schools of Fiqh have differences on the matter of price. Maliki Jurisprudence, Hanafi jurisprudence, Shafi jurisprudence and Hanbali jurisprudence all have some variations in discussing the price. In discussing the Sale object different Fiqh have discussed it differently which means that Shariah issues do exist in Salam Contract. The Scholars have agreed on the point that selling goods which does not owned can lead to uncertainty. However Salam contract has exception.

        Through performing excessive literature review it can be said that the major issue which is occurring in the Salam contract regarding the Sariah are the various variations which exist in different Fiqh. Different Scholars have provided different views on Salam Contract which causes issues for the Islamic Bank to adopt the Salam contract effectively. In the meeting of International Islamic Fiqh Academy and AAOIFI (Accounting and Auditing Organization of Islamic Financial Institutes) have set standards for the Salam contract.

        It would be better if the banks adopt such strategies which improves the performance of the banks in the long run.  In Islamic Banks the Sariah laws play significant role in their efficiency and performance. Therefore there is a need to resolve the Sariah issues in the Salam Contract. The analysis has indicated that if the issues are resolved than the performance of the banks can be enhanced. On the other hand legal Issues can be resolved through proper identification of risks and making new policies for legal issues. The issues which the bank face have increased up to lot of extent due to the increase in the amount of competition.

References of Sharia and Legal Issues in Salam Contract Bank

Aebi, V., Sabato, G., & Schmid, M. (2012). Risk management, corporate governance, and bank performance. 36, 3213–3226.

Dchieche, A., & Aboulaich, R. (2016). New approach to model Salam contract for profit and loss sharing. International Journal of Applied Engineering Research, 11(2), 909-916.

Hisham, A. F., & Jaffar, M. M. (2016). Salam contract with credit risk model by partial differential equation approach. Jurnal Teknologi, 78(11), 75-84.

Hisham, A. F., & Jaffar, M. M. (2017). Modeling commodity salam contract between two parties for discrete and continuous time series. AIP Conference Proceedings, 1870(1).

Hisham, A. F., Jaffar, M. M., & Othman, J. (2017). Deriving Partial Differential Equation for the Value of Salam Contract with Credit Risk. Pertanika Journal of Science & Technology, 25(3).

Kanno, M. (2015). Assessing systemic risk using interbank exposures in the global banking system. 20, 105-130.

Razak, D. A., & Tazwar, F. (2018). Islamic Home Financing Practices In Selected Oic Countries: An Assessment In The Light Of Maqasid Al-Shariah. Journal of Islamic Management Studies, 1(2), 1-11.

Zaabi, O. S. (2011). Salam Contract in Islamic Law: A Survey.