Glossary

Religious tax to purify the wealth.

Agency Contract.

Fees and charges.

Commodity Murabahah. Monetization or Cost plus sale using commodities.

Islamic insurance.

Refers to the divine guidance as given by the Holy Quran and the Sunnah of the Prophet. It embodies all aspects of the Islamic faith, including beliefs and practice.

Voluntary charitable giving or donation.

Goods subject to Fiqh rules on Riba in sales i.e. gold, silver, wheat, barley, date and salt.

An excess or increase over the principal in a loan transaction or in exchange for a commodity accrued to the owner (lender) without giving an equivalent counter-value or recompense in return to the other party.

Collateral.

The capital provider or the investor who will deposit or invest the money with the Mudharib/entrepreneur.

Benevolent loan.

The acceptance of a contract.

Individuals or companies involved in haram activities as prescribed by Shariah.

Partnership and joint purchase of the asset by two contracting parties. One of the partners promises to buy over the equity share of the other gradually until the title is completely transferred to the former.

Partnership/ Joint venture under the profit and loss sharing agreement.

Cost-plus financing.

The entrepreneur or the bank accepting the money from the investor to be invested on behalf of the investors.

A form of partnership where one party provides the funds while the other provides expertise and management.

Gambling or a form of speculation.

Guarantee.

Lease/ Hire.

Refers to ‘the offer’ in a contract.

Rebate/ Set-off.

Gift as a token of appreciation.

Unlawful, forbidden or prohibited by Shariah.

Anything that is permitted by Shariah.

Referred to as an uncertainty.

Islamic law or jurisprudence.

The bank’s purchase price or the amount paid by the bank to acquire the goods.

Also known as a Mudi' in a Wadiah Account and Rabbul-Mal in a Mudharabah Investment Account.

Debt.

The person who is applying for the financing facility with the bank.

The sale of goods on a deferred payment basis.

Sale and buy-back contract.

Sale on future delivery.
A contract whereby the payment is made in cash at the point of contract but delivery will be made at the pre-determined future date.

Refers to deposit in trust.
Entails absence of liability for loss except in breach of duty.
Current Accounts are regarded as Amanah (trust).
If the bank gets authority to use the funds for its businesses, then it would transform into loan.

An agreement between two parties.