SS 30 – Monetization (Tawarruq)

The purpose of this standard is to indicate the essence of Monetization and explain the Shari’ah conditions for its validity, as well as the controls pertaining to its application in Islamic financial Institutions (Institution/ Institutions).

The word (Institution/Institutions) is used here to refer, in short, to Islamic financial institutions including Islamic Banks.

Scope of the Standard

This Standard covers the different applications of monetization, whether the beneficiary is the customer or the institution. 2. Definition of Monetization and Its Distinction from 2. Definition of Monetization and Its Distinction from Bay’ Al-’Inah

Bay’ Al-’Inah

Monetization refers to the process of purchasing a commodity for a de- ferred price determined through Musawamah (Bargaining) or Murabahah (Mark-up Sale), and selling it to a third party for a spot price so as to obtain cash. Whereas ’Inah refers to the process of purchasing the commodity for a deferred price, and selling it for a lower spot price to the same party from whom the commodity was purchased. 3. Mutawarriq (Monetization Beneficiary)