• Home
  • Finance
    • Financial Management
    • Strategic Management
    • Investment Analysis and Portfolio Management
    • Project Management
    • Islamic Banking & Finance
    • Auditing
  • Marketing
    • Principle of Marketing
    • Marketing Management
    • International Marketing
    • Advertising & Promotion
    • Commercial Challenges
  • HRM
    • Human Resource Management
    • Principles of Management
    • Training & Development
    • Employee Performance Management
  • Others
    • Introduction to Business
    • Business Communication
    • Banking & Finance
    • Entrepreneurship
    • Economics
  • Personal Skills
  • Tips & Tricks
  • About Us
    • Contact US

Business Study Notes

B.Com, M.Com. BBA & MBA Exam Study Online

  • Home
  • Finance
    • Financial Management
    • Strategic Management
    • Investment Analysis and Portfolio Management
    • Project Management
    • Islamic Banking & Finance
    • Auditing
  • Marketing
    • Principle of Marketing
    • Marketing Management
    • International Marketing
    • Advertising & Promotion
    • Commercial Challenges
  • HRM
    • Human Resource Management
    • Principles of Management
    • Training & Development
    • Employee Performance Management
  • Others
    • Introduction to Business
    • Business Communication
    • Banking & Finance
    • Entrepreneurship
    • Economics
  • Personal Skills
  • Tips & Tricks
  • About Us
    • Contact US
Home » ISTISNAA Definition | Benefits and Condition to Apply in Business

ISTISNAA Definition | Benefits and Condition to Apply in Business

By Richard Daniels Reading Time: 2 mins
Updated August 8, 2017

ISTISNAA Definition

ISTISNAA is a business contract under which one party requests another to manufacture or construct a work for a fee payable in advance, on a fractional basis or term. This is a variant similar to the MUSAWAMAH contract, except that the object of the transaction is the delivery, not of goods purchased as such, but of finished products which have undergone a transformation process.

Compared to the commercial practices of our time, ISTISNAA identifies itself with the contract of enterprise defined by article 549 of the Algerian Civil Code as follows: «The contract of enterprise is the contract by which one of the parties s’ Oblige to carry out a work or to perform work for remuneration which the other party undertakes to pay to him “.

The ISTISNAA formula, put into practice by an Islamic Bank, may take the form of a triangular operation involving the Bank and the Employer and the Contractor in the framework of a Double ISTISNAA.

Benefits of ISTISNAA Financing

ISTISNAA is a formula that allows the Islamic Bank to assist in the construction, refurbishment, development and finishing of mass works. It also finances the construction of production, transport and consumption equipment to the order of users and / or resellers.

Finally, it offers an alternative solution according to Islam’s precepts to the technique of advances on the market thanks to the double ISTISNAA method described above.

Conditions to Apply ISTISNAA in Business

  • The basic principle is that the remuneration of the Bank under ISTISNAA is justified by its intervention as contractor responsible for carrying out the work relating to the construction of the work covered by the contract, either directly or through subcontractors.
  • The ISTISNAA contract must involve work to convert a material, a semi-finished product or components into a ready-to-use finished product.
  • The contract must specify the nature, the quantity, the quality and the specification of the goods to be manufactured.

Materials, components or semi-finished products must be brought or financed by SANI’I (the contractor).

Author at Business Study Notes
Richard DanielsAuthor at Business Study Notes

Hello everyone! This is Richard Daniels, a full-time passionate researcher & blogger. He holds a Ph.D. degree in Economics. He loves to write about economics, e-commerce, and business-related topics for students to assist them in their studies. That's the sole purpose of Business Study Notes.
Love my efforts? Don't forget to share this blog.

Related Posts:

  • Musawamah Definition & Conditions to Apply and Benefits for…
    Musawamah Definition & Conditions to Apply and Benefits for Business
  • Warehousing Definition, Advantages, Functions, Roles and…
    Warehousing Definition, Advantages, Functions, Roles and Types in Detail
  • What is the Process of Motivation? Explain in detail
    What is the Process of Motivation? Explain in detail
  • What is the Banking System? 10 Types of Banking Systems…
    What is the Banking System? 10 Types of Banking Systems Explained
  • How to Calculate Slack Time? Slack Time Formula Explained…
    How to Calculate Slack Time? Slack Time Formula Explained with Example

Filed Under: Islamic Banking & Finance

Related Posts

System-Views-of-Management-image

System Views of Management

System Views System views of management associates with the Management division of the organization and it assumes that all of the organizations are … [Read More...]

Leadership Theories

Situational Leadership Theories

Situational Leadership Theories Situational model of leadership is a factor that emphasizes the behavior of the leaders regarding different situations. … [Read More...]

Behavioral Leadership Model

Behavioral Leadership Model

Leadership  Leadership is the most critical and complex responsibility across any organization. It is because the leadership requires to be realistic, … [Read More...]

career development process in hrm

Career Development Process

Career Development Process Today's career development process has become a threat for students, especially a question that may stun many students who have … [Read More...]

Strategic leadership

Strategic Leadership Model

Strategic Leadership Model The strategic leadership model is basically the study of the leadership style. It describes the ways of modernizing an … [Read More...]

Types of Managerial Decision Making

Types of Managerial Decision Making

Managerial Decision Making Decision Making is an art of selection of one feasible alternative decision from many. Therefore types of managerial decision … [Read More...]

Quantitative-management-approach

Quantitative Management Approach

Quantitative Management Approach The quantitative management approach is used to enhance decision making power by using quantitative tools. As well as … [Read More...]

Effective-business-messages-image

Effective Business Messages

Effective Business Messages The process through which business messages are effectively prepared that have the potential to create desired results from … [Read More...]

Search the Site

ADVERTISEMENT

Business Study Notes

Business Study Notes is all about business studies or business education. Visit us to find here free business notes of all the subjects of B.com, M.com, BBA & MBA online.

Disclaimer

All the images and videos present on the Business Study Notes are not owned by us, if you found anything under copyrights, please Contact Us, we will remove it ASAP.

Categories

© Copyright 2023 Business Study Notes. All rights reserved. Privacy Policy, Sitemap.  
DMCA
PROTECTED