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Glossary

Definitions of Islamic Banking and Finance terms

List of Glossary


TERMSMEANING
Al-ijarah thumma al-bai` Lease contract followed by ownership of asset through a sale contract
Aqd Contract
Bai` Sale
Bai` `inah An arrangement that involves sale of an asset to the purchaser on a deferred basis and subsequently purchase of the asset at a cash price lower than the deferred sale price or vice versa and which complies with the specific requirements of bai` `inah
Bai` al-usul bi al-khasm Sale of asset at discount
Bai` bithaman ajil Sale contract based on deferred payment at certain price
Bai` dayn Sale of debt
Bai` salam Sale contract based on order of certain asset with certain specifications. Full payment is made in cash at the time of conclusion of the contract whereas the delivery of the asset is deferred to a specified time
Bai` wadhi`ah Sale contract with a price lower than acquisition cost
Bai` wafa Sale with a right in the seller to repurchase the property by refunding the purchase price
Bai’ sarf Sale of currency
Bai’ muzayadah Sale contract based on bidding or auction
Dalil Evidence, indicative legal text
Dhaman Guarantee
Dharar Harm
Dhawabit Guidelines
Faraid The knowledge or rules on estate distribution according to Islamic principles
Fatwa Decree, religious edict from a qualified scholar
Fiqh muamalat Islamic commercial law
Fuqaha Islamic jurists
Gharamah Penalty
Gharar Uncertainty
Ghasb Confiscation or unlawful seizure of property
Hadith Prophetic tradition
Hamish jiddiyyah Security deposit
Hawalah Debt Assignment Contract
Hibah Gift
Hibah ruqba A gift during the lifetime of the giver or recipient of hibah with a condition that the death of a party (either the giver or recipient of hibah) is the effective condition for ownership of the property by the surviving party
Hibah umra A gift during the lifetime of the recipient or giver of hibah on the condition that the property will be returned to the giver in case of death of the recipient
Hukm Shariah Ruling
Ijtihad Reasoning by qualified scholars to obtain legal rulings from the sources of Shariah
Istisna` Sale contract by way of order for certain product with certain specifications and certain mode of delivery and payment (either in cash or deferred)
Istisna` muwazi Parallel Istisna`
Jahalah Ignorance or lack of knowledge
Jumhur Majority
Kafalah Guarantee
Kafil Guarantor
Marhun Charged property
Maslahah Public interest
Maysir Gambling
Mudarabah Profit sharing contract
Mudarib Entrepreneur of a mudarabah joint venture
Murabahah Sale contract with a disclosure of the asset cost price and profit margin to the buyer
Musawamah Sale contract without the disclosure of the asset cost price and profit margin to the buyer
Musharakah Profit and loss sharing contract
Musharakah mutanaqisah A contract of partnership that allows one (or more) partner(s) to give a right to gradually own his share of the asset to the remaining partners based on agreed terms
Muqasah Offsetting
Murtahin A party who asks for collateral
Musharik Partner
Musya` Jointly-owned property
Nafaqah Cost of liability
Qabadh Possession
Qard Loan
Qard hasan Benevolent Loan
Qiyas Analogy
Rabbul mal Capital owner/investor
Rahin Chargor
Rahn Pledge/Charge
Riba Usury
Sadd zari`ah Blocking the means to something (evil)
Sukuk Islamic securities/bonds
Ta`widh Compensation
Tabarru` Voluntary donation/contribution
Takaful A scheme which is based on the spirit of cooperation and helping each other by providing financial assistance to participants when needed and all participants mutually agree to give contribution for the said purpose
Taklufah Actual cost
Takyif fiqhi Fiqh adaptation
Tanazul Waive of the entitlement to claim
Tasarruf Dealing
Tawarruq/commodity murabahah Purchasing an asset with deferred price, either on the basis of musawamah or murabahah, then selling it to a third party to obtain cash
Ujrah Commission
Wa`d Promise
Wa`d mulzim Binding promise
Wadi`ah Safe keeping contract in which a party entrusted his property to another party for safe keeping and to be returned upon request
Wadi`ah yad amanah Safe keeping contract based on trust
Wadi`ah yad dhamanah Safe keeping contract with guarantee
Wakalah Agency contract
Wakalah bi al-istithmar Agency contract for investment
Waqaf A form of endowment by an owner of a property for public benefit and wellbeing which is allowed by Shariah.
Wasi A person appointed to execute a will
Zimmah Liability
`Illah Effective Cause
`Uqud al-muawadhat Contracts of exchange
`Uqud mustajiddah Contemporary contracts
`Urbun Down payment/deposit
`Urf Customary practices
`Iwad Consideration