IBANK 6.7.5 Treatment of Istisna without Parallel Istisna

(1) If an Islamic banking business firm is the seller under an istisna without parallel istisna contract, the firm is exposed to market risk when there is unbilled work-in-process inventory. The capital charge for the contract is 1.6% of the firm's unbilled work-in-process inventory.
(2) If an Islamic banking business firm is the buyer under an istisna without parallel istisna contract, the firm is exposed to market risk as it makes progress payments to the supplier. The capital charge for the contract is 15% of the work-in-process inventory.
Derived from QFCRA RM/2015-2 (as from 1st January 2016).