Today Islamic Finance is focused all over the world, because every other system has failed in the solution of world''s financial problems in the previous few decades, Islamic Banks have been developed. Now a days Islamic Banks have succeed in their various objects. For their initial objects, Islamic Banks have selected a verity of modes of finance, in which Murabaha is on top. The following thesis also discussed an important mode of finance which is named"Tawarruq"We have discussed its diffinition,approach,scop,its need in Islamic Finance, and its application in Islamic Banks. We also have effect a model of Tawarruq from Bank Negara. The drawbacks of Tawarruq,its economic impacts and its miss application and its effect has also been given attention. We have concluded that Tawarruq is a permissible mode of Finance, but not a model for the best economic system. It should be treated as a provisional solution.