In connection with istisna’a, it is the difference between the cash price of the underlying (al-masnoo’, the asset or al-ayn to be manufactured) which would be delivered to the buyer (al-mustasni’) and the bank’s (al-sani‘s) estimated total costs associated with the istisna’a contract.
It is similar to a bank’s interest margin (in conventional banking) only in the sense that the bank plays the role of an intermediary between the ultimate buyer and the maker/ manufacturer of the object of istisna’a. By nature, a profit margin relates to an istisna’a tamwili transaction.
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