Possession is one of the fundamental elements to acquire wealth in a valid manner. Financial contracts will not be concluded and irrevocable without possession of respective subject matter. It has been observed that in contemporary Islamic banking products and transactions mostly, not the real, but a legal or constructive possession is practiced, and in this context the customary practices play a significant role in determining the proper mode of possession. Thus, this effort intends to investigate the essence of possession and its appropriate mode for contemporary Islamic financial transactions. This is a library-based research and it has adopted qualitative document and content analysis. The classical references to prominent Schools of Islamic law have been utilized as the primary tools to perform this analysis and investigation. The study finds out that the essence of possession is to relinquish it to the merchandise and its rightful beneficiary, so that it can be enjoyed without any interruption. It posits that the mode of possession would be varied subject to the nature of the commodity itself.