Glossary of Terms

GLOSSARY
ARABIC TERMS

ENGLISH TERMS

Al-bai`

Sale contract

Al-ijarah thumma al-bai`

Lease contract followed by ownership of asset through a sale contract

Al-muqasah

Offsetting

Bai` dayn

Sale of debt

Bai` sarf

Sale of currency

Bai` bithaman ajil

Sale contract based on deferred payment at certain price

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

Dayn mustaqir

Debt which the liability to pay is established

Gharamah

Fine/penalty

Gharar

Uncertainty

Gharar yasir

Minimal uncertainty

Halal

Permissible

Hamish jiddiyyah

Security deposit

Hawalah

Debt Transfer

Hibah

An act of transferring of ownership of an asset or usufruct without an exchange of counter value during the lifetime of the transferor

Ibra’

Rebate/waiver of partial or total claim against certain right or debt

Ijarah

Lease or service contract that involves benefit/usufruct of certain asset or work for an agreed payment or commission within an agreed period

Ijarah muntahia bi al-tamlik

Lease contract which ends with acquisition of ownership of the asset by the lessee

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)

Kafalah

Guarantee

Kafalah bi al-Ujr

Guarantee with fee

Kafil

Guarantor

Manfa'ah

Usufruct; the right to enjoy the use and advantages of another's property short of the destruction or waste of its substance

Maqasid Shariah

Objectives of Shariah

Mudarabah

Profit sharing contract

Muqasah

Offsetting

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

Musyarakah

Profit and loss sharing

Qabd

Possession

Qard

Loan contract

Rahn

Pledge/charge

Riba

Usury; the illegal action or practice of lending money at unreasonably high rates of interest

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

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

Urbun

Down payment/deposit

Urf

Common practice which is acceptable by the community and does not contradict the Shariah rulings

Urf tijari

Common business practice which is acceptable by the community and does not contradict the Shariah rulings

Wa`d

Promise

Wakalah

Agency contract

Wakalah bi al-istithmar

Agency contract for investment