Modern Islamic Banking

Glossary

Unlike the specific definitions provided in the relevant chapters, this glossary provides an overview of all Arabic definitions, accompanied by a brief description. Additional definitions not necessarily included in the text can also be found in this list.

Aq'd

Contract or transaction that is executed between two or more parties for mutual ­benefit.

Arbun

Down payment on a sales contract in which the buyer has not paid the full price or taken possession of the goods. Deposit is non-refundable. Buyer can opt to cancel the contract.

Fatwa

Declaration in Islam provided by an Islamic legal specialist.

Fiqh

Understanding of the (Islamic) law.

Fiqh al muamalat

Islamic commercial jurisprudence.

Gharar

To deceive, cheat, delude, lure, entice and create uncertainty. Also defined as “the sale of probable items whose existence or characteristics are not certain”.

Hadith

Narrative record of the sayings and actions of the Prophet.

Halal

Permitted.

Haram

Prohibited.

Hawala

Transfer of money from one person to another. Recipient may levy administration charges, which should not be proportionate to the sum of money.

Ijara

Bilateral contract allowing the sale of the usufruct for a specified rent and a specified period. A lease.

Ijara wa iqtina

Lease with transfer of ownership at the end of the lease period or finance lease. Variations exist such as the ijara muntahia bittamleek, which is a finance lease structure in which the lessee has the option to exercise his right ...