Tools of addressing Short-Term Funding Risks in Islamic Banks -Salam Financing As a model-

Abstract

Islamic banks rely on short-term funding in the financing process of non-financial economic agents, and the Salam is considered as the most important tools, because of its high financing capacity that includes all economic activities.

This study aims to clarify the risks that Islamic banks may encounter in the financing of Salam, and to highlight the tools for dealing with them and the extent of their legitimacy, by using the descriptive and analytical approach. One of the most important results of the study is that among the tools for dealing with the risks of financing in the  Salam is the equation of charity and parallel Salam, the authority of the recipient to the seller to sell the delivered commodity after receiving it, documenting the Salam with a mortgage or guarantee, and Takaful insurance.