A

'Amil

العميل

The party which provides work and management in a Mudaraba contract.

'Arboon

العربون

A sum of money (deposit) paid by the purchaser to the seller, on condition that, if the purchaser takes the goods then this money will be considered as a part of the price and if he defaults then that deposit will be taken by the seller.

Ayah

آية

A verse of the Quran.

B

Bait ul-Maal

بيت المال

State treasury.

D

Dhimma

ذمة

The qualification of a nominal (company) or a natural person to bear obligations and enjoy rights. Hence debts of companies or persons whether incorporeal property or fungible are tied or related to it (dhimma).

F

Fatwa (pl) Fatawa

فتاوى بالفتاوى

Formal Shari'ah opinion on a specific matter given by Muslim Scholar ('Alim) see also 'Ulama.

Fiqh

فقه

Islamic jurisprudence.

G

Gharar

غرر

Risk and uncertainty. A contract would be replete with gharar if the outcome is not contractually certain and that rights and obligations of the parties are not fixed. Wagering would be the most gharar ridden contract.

I

Ijtihad

اجتهاد

An independent reasoned interpretation for texts of Quran and Sunnah to reach a verdict or conclusion in certain matter.

'Imam

امام

The word is used in many different senses, its most common being a leader of the congregation at prayer; it is also used to denote the founders of different schools of Muslim jurisprudence (Medhahib) or other eminent jurists. It is also used to refer to the ruler.

'Inah

عينة

Selling of an object on deferred payment basis with a condition to buy it back from the person to whom it was sold on cash at a lower price. It is considered as a device to borrow money under the guise of sale.

'Iwad

عوض

Price and sold object in a contract of exchange are both called  'Iwad .

Ijarah

اجارة

(Lease of objects): is the selling of a defined benefit against a specific consideration for a fixed period.

Istisna'

استصناع

is a contract in term of which a person buys on the spot something that is to be manufactured which the seller undertakes to provide after manufacturing same using materials of his own according to designated specifications against a determined price.

j

Jahalah

جهالة

Unknown elements in the contract. An example would be buying one sheep of a herd of sheep without identification of the particular one that is sold. So we know that one is sold but we don't know which. If the contract states sale of something which could be one sheep or something else then it is gharar. Hence all Jahalah is gharar but not vice versa.

K

Kaali

الكالي

Means deferred, it refers here to debt.

al-Kaali Billkaali

الكالي بالكالي

A sale contract where both price and sold object are deferred, and sale of debt to the debtor (or to other) on deferred payment basis for the same amount of debt or with excess.

al-Kharaj

الخراج

Earnings or benefits generated from owning an asset.

al-Kharaj biddaman

الخراج بالضمان

Who ever is responsible for damage or loss of an asset, deserves to receive any earning, generated by that asset. Therefore, if a person buys a house and rents it, then had to return it back because of a defect in the house, that person is the rightful owner of the rent paid to him during that period. This is because if anything goes wrong with the house during that period it would be his responsibility.

M

Masnou'

مصنوع

is every thing that is manufactured under an Istisna' contract, which could be a capital asset, buildings, machines, equipment, consumer or production commodities, software and so on, hereinafter referred to as commodity / commodities.

Medhahib (singular, Medhhab)

المذاهب

Islamic schools of jurisprudence. There are four main Sunni schools, Malki, Hanafi, Shafi'i and Hanbali. See also, al-Medhhab al Malki, al-Hanafi, al-Shafi'i, and al-Hanbali.

al-Medhhab al-Hanafi

المذهب الحنفي

A school of Islamic thought, named after       Abu Hanifa Al-No'man who is considered the founder of this school, he was one of the great Muslim jurists, who interpreted Quranic teaching and Prophet's, peace on him, Tradition. Al-Medhhab al-Hanafi was the first of the Sunni school of jurisprudence.

al-Medhhab al-Hanbali

المذهب الحنبلي

A school of Islamic thought, named after its founder, Ahmed Ibn Hanbal.

al-Medhhab al-Malki

المذهب المالكي

A school of Islamic thought, named after its founder, Malik Ibn Anas.

al-Medhhab al-Shafi'i

المذهب الشافعي

A school of Islamic thought, and named after its founder, Mohammad Ibn Idris Al-Shafi'i.

al-Mithliyaat

المثليات

(Fungibles): are the comparable commodities in terms of their characteristics so that the units thereof are comparable and identifiable in the market and could be established as a debt in dhimma (q.v.) such as wheat, oil, copper…. etc.

al-Mudareb Udareb

المضارب يضارب

This concept means that a Mudareb instead of indulge in business by himself he advances Mudaraba to another Mudareb to work on it. Hence, this concept consists of two Mudaraba contracts where the Mudareb in the first contract is the  Rabbul-mal in the second one.

al-Muslam Fiihi

المسلم فيه

is the commodity which is the subject of the Salam contract.

al-Muslam Ilayhi

المسلم إليه

is the seller of the deferred commodity in a Salam contract, i.e. the one who receives the Salam capital (price of commodity) in advance from the buyer.

al-Muslim

المسلم

is the buyer in a Salam contract. Not to be confused with the Muslim (Moslem), one who professes Islam.

Mu'awadah (pl) Mu'awadat

المعاوضة بالمعاوضة

Exchange of 'Iwad (q.v.), i.e. exchange price and commodity in a sale contract.

Mudaraba Finance

المضاربة المالية

This is a profit-sharing partnership formed between a bank and a client who may be an individ­ual or a body corporate, under which the bank would be rabb ul-maal (q.v.) (the money provider) in accordance with the well-known rules of Mudaraba (q.v.) in Islamic Shari'ah.

Mudaraba Investment

المضاربة الاستثماررية

This is a profit-sharing partner­ship formed between the bank and one or more of its clients.  In this type of Mudaraba (q.v.), the bank is the Mudareb (q.v.) in accor­dance with the well-known rules of Mudaraba  (q.v.) in Islamic Shari'ah, and is entitled to mix the sums of money invested by the clients, and to permit the clients to join and withdraw from the fund in accordance with rules that are agreed upon in the contract.

Mudareb

مضارب

The bank's client that invests the Mudaraba capital.

Murabaha

مضاربة

The intermediation of a bank in the purchase of a commodity upon the request of a client and then selling same on deferred payment terms for a price equivalent to the total cost of purchase plus a fixed profit (mark-up) agreed upon by both bank and client.

Musaqah

مساقاة

A fruit sharing agreement between an Orchard owner and one who provides the necessary labour.

Musharakah

مشاركة

see Al-Musharakah Al-Masraffiya.

Musharakat

المشاركات

(pl) of Musharakah. Sometimes the plural of Musharakah is used to refer to both Musharakah and Mudaraba

Mustasne'

مستصنع

is the purchasing party under an Istisna' con­tract, who is bound, pursuant to the contract, to accept the manufactured commodity if it conforms to the specifications

Muzara'ah

مزارعة

Share cropping agreement.

Q

Quran

قرآن

The Holy Book of Muslims consisting of the revelations made by Allah to the Prophet Mohammad (pbuh) during his prophethood life. The Quran consists of 30 parts, 114 chapters (Surah) and over 6600 verses (Ayyah).

Qismah

قسمة

This means the distribution of profit between the bank and the Mudareb.

al-Qaimiyyat

القيميات

are the commodities whose units are so different that they cannot be established as a debt in dhimma.

R

Rabb ul-maal

ربع المال

The bank that provides the Mudaraba capital.

Riba (usury)

ربا

Any amount in excess of the loaned amount charged by the lender from the debtor.

S

Sane'

صانع

is the seller who undertakes, under an Istisna' contract to supply the client with al-masnou' (q.v.) (manufactured object)at maturity (the designated time), whether he himself manufactures the object or whether he has it made by another sane' (q.v.).

Sarf

صرف

Sale (Exchange) money for money.

Shari'ah

شريعة

Islamic law; refers to the divine guidance as given by the Quran and Sunnah and embodies all aspects of the Islamic faith, including beliefs and practices.

al-Salam

السلم

is a nominate contract in Islamic Shari'ah. It is a deferred delivery sale described as a debt in the seller's dhimma (q.v.) the price is paid in advance, while the sold commodity is deferred to a specified future delivery date.

al-Salam Al-Haall

السلم

A Salam contract where both commodity and consideration are exchanged simultaneously without commodity being deferred.

al-Sharikah (partnership)

الشركة

Under this standard Al-Sharikah means any contract made by two or more parties pertaining to capital and work (management) for the purpose of making profit.  This is known among jurists as sharikat ul-amwaal (finance partnership).

al-Sharikah Al-Masrafiyya 

الشركة المصرفية

(Banking partnership) (Al-Musharakah): a finance method derived from the partnership contract that is known in Islamic jurisprudence, in which the bank participates with one client or more.  It is designated to be called Musharakah in contemporary banking practice.

Sharikat Al'Anan

شركة العنان

A partnership involves partners who contribute capital jointly, possibly in different percentages, and perform work, possibly of various types on the agreement that they will share profit according to their agreement and loss proportionately to their share in capital.

Surah

سورة

A chapter of the Quran. There are 114 Surahs of varying lengths in the Quran.

Sunnah

سنه

Traditions of Prophet Mohammad “PBUH”. Sunnah include the Prophet sayings, doing, or practice tacitly approved by Him. Sunnah is the most important source of the Islamic faith after the Quran.

T

Tandeed

تنضيض

is the conversion of the Musharakah assets into money, in actual practice, through sale, or constructive­ly, through accounting methods which rely on the valua­tion of assets at a certain date and effecting the division (distribution) of profit accordingly.

U

'Ulama (pl) 'Alim

علماء

Muslim Scholar who is knowledgeable in Islamic jurisprudence (Fiqh).

W

Waqf

وقف

endowment