Wadiah Yad Dhamanah |
Deposit are placed under trust with guarantee. |
Mudharabah |
Trustee profit sharing partnership. Profits are shared on the agreed ratio when investment(s) are profitable but any losses are borne by the provider of funds. |
Musharakah |
A joint venture or partnership where any profits made are shared on an agreed ratio and losses are also borne by both parties. |
Murabahah (cost plus) |
Sale contract that is valid on the condition that the price, other costs and the profit margin are stated at the time of the agreement of sale. |
Bai Bithaman Ajil |
Sale of goods on a deferred payment basis at the price inclusive of the profit margin agreed by both parties. |
Bay al-Dayn |
Buying and selling of debt certificates, securities, trade document and papers in the secondary markets, which are Shariah compliant. |
Bai al Einah |
An asset is sold on deferred payment basis at a price inclusive of profit and is bought back at the principle price on cash basis. |
Ijarah Thumma al-Bai |
FLease and subsequent purchase whereby the goods are first on leased over specific period and upon expiry, the goods are purchased at an agreed price. |
Ijarah |
Leasing at an agreed leasing period, rental fees and charges. |
Qard |
A benevolent financing whereby only the payment of principal amount is required. |
Bai’ Salam |
Advance payment for goods delivered in the future. |
Bai’ Istijrar |
An agreement on a supply of a particular product is on going (monthly, yearly etc) with an agreed price and mode of payment. |
Kafalah |
A contract of guarantee on the performance of the contract terms by contracting parties. |
Rahnu |
Making an eligible asset a security or collateral for a debt. The collateral (security asset) will be liquidated to settle the debt when the debtpr is in default. |
Wakalah |
An agreement where a person nominates another person to act on his behalf. |
Hiwalah |
Remittance between accounts whereby a commission may be charged for such service. |
Sarf |
Foreign exchange. |
Ujr |
Commission or fee charged for services. |
Hibah |
A gift that is awarded voluntarily and cannot be demanded. |
