The and Pakistan have introduced parallel as well

The modern world knows of the necessity to offer services related to the matters which fulfills the trade financing sector of international market. Islamic banking has now become a thing in financial market. Its financial services are growing and have become a US$50-$80 billion industry and Islamic banks are providing their services in almost 45 distinct countries including United Kingdom, North America and Africa. Most of the Islamic countries like Malaysia, Iran and Pakistan have introduced parallel as well as distinct Islamic and conventional banking systems which provide interest-free financial instruments and products. When exercising an Ijtihad in permitting the application of wa’d, contemporary jurists observed it as a necessity for the interest of the contracting parties. According to them, wa’d should not be rigidly construed in its limited application. Instead, wa’d can be become an innovative tool in structuring many forward contracts which require flexibility with full commitment of the parties involved without jeopardizing the basic principles and maqasid Al-Shari’ah. It is a unanimously-excepted principle that fulfilling promise is a must for an ethical and religious reason. An absolute promise which is not subject to a particular reason and neither affects to a loss to the other party, is not legally binding. But the promisor will be labeled as a liar, thus, sinful in the eye of Allah. On the other hand, conditional promise becomes binding and enforceable because it may affect the other party’s interest who may suffer loss if the promise is not fulfilled. A promise to buy goods that the promisor initially orders from the promisee becomes binding and enforceable in avoidance of gharar (unknown element) in the subject matter of promise.In the actual application to Islamic banking products, Wa’d is commonly used to show parties’ commitment to complete the contract. Its application and enforcement is some how subject to certain guidelines, such as, the promise and other related undertakings are not integral to the main contract; the promise should not include a bilateral promise that is binding on both parties, but the bilateral promise is deemed to be permissible only if there is an option to cancel the promise which may be exercised by any of the parties.