National Shari'a Board - Indonesian Council of Ulama Fatwa No. 5 of 2000 on Salam Sale-Purchase

This fatwa acknowledges that the sale-purchase of items by placing an order and pre-paying for those items, pursuant to certain conditions (known as salam), now involves banks. In order that these types of transactions are shari'a-compliant, the fatwa acknowledges the need for a set of guidelines for shari'a financial institutions.

The fatwa mandates a set of conditions for the purchase of an item, the quality therein, as well as the need for the specifications of the item to be clear, and how the purchaser may deal with the item prior to reaching and agreement with the vendor, as well as prior to receipt of the item.

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