Trade finance plays an important role in facilitating trade transaction between buyers and sellers. It is a form of short term banking facility to help the buyers/sellers in managing its cash flow in the short run. For decades, banks worldwide have been practicing the conventional method of trade financing until recent years with the emergence of the Islamic Banking System. The system has become very popular particularly in the region because it offers an excellent alternative to the customers.

Islamic trade finance operation is specialised area of Islamic banking utilising various concepts that need to be understood by the parties involved particularly bankers and traders.