Bai-Murabaha is a contract between a buyer and a seller under which the seller sells specific goods permissible under Islamic Shari’ah and the law of the land to the buyer at a price determined by adding an agreed profit margin or mark-up to the cost price. Under this arrangement, the buyer may either make immediate payment to receive the goods or pay the agreed price in installments or on a fixed future date. The profit mark-up may be determined either as a lump sum amount or as a percentage of the cost price of the goods.

The term Bai-Muazzal means “deferred payment sale” or “sale on credit.” Under this mode of investment, a contract is executed between the buyer and the seller for the purchase and sale of goods approved by Islamic Shari’ah and the law of the land, with the condition that the agreed price will be paid either on a specified future date or in fixed installments.

Under the Bai-Salam mode of investment, payment is made in advance for the purchase of goods, and the supplier undertakes to deliver the goods at a future date. This mode of investment is primarily used to meet the exporter’s expenses other than the manufacturing cost of exportable goods. Under this arrangement, the Bank purchases a portion of the exportable goods and makes advance payment on the condition that the exporter will export the goods purchased by the Bank along with the exporter’s own goods. The purchase price is determined by deducting the Bank’s estimated profit from the value of the purchased portion of the exportable goods. The Bank recovers its investment after the realization of export proceeds.

Under the Mudaraba mode of investment, the client, businessman, or entrepreneur does not contribute any capital. In this arrangement, the Bank provides the entire investment capital, while the entrepreneur (the client) is responsible for directly managing and operating the business in accordance with Shari’ah principles.

Musharaka is an Islamic financing arrangement based on a joint partnership in which two or more parties contribute capital to a business, enterprise, or project and share in the profits and losses according to agreed terms. The contributions may be made in the form of cash, assets, or services, and may be in equal or varying proportions depending on the terms of the agreement. Profits are distributed according to a pre-agreed ratio, which does not necessarily have to correspond to each partner’s capital contribution. However, any losses are borne strictly in proportion to the amount of capital contributed by each partner.

Hire Purchase under Shirkatul Melk (HPSM) is an Islamic financing concept that combines three modes: rent (Ijara), partnership (Shirkat), and buying and selling. It integrates the principles of Shirkatul Melk (joint ownership) and hire purchase (installment-based acquisition). Under this arrangement, the Bank and the client jointly invest capital through a partnership agreement known as Shirkat. The Bank then leases its ownership share to the client in exchange for an agreed rental. Over time, the Bank gradually sells its ownership share to the client upon receipt of the agreed price, enabling the client to acquire full ownership of the asset in a Shari’ah-compliant manner.