|Lessor (also employee who leases its services to the employer)
|Commission, fees or wage charged for services
|A non-refundable deposit paid by a potential buyer retaining the right for a specified period either to confirm or cancel the impending sale.
|Bai Muajjal is a deferred sale contract at a fixed price whereby the seller delivers the goods to the purchaser on spot (i.e. at the time of signing of the sale contract) while the purchaser pays the purchase price on a later date in lump sum, on different agreed future dates in known equal or unequal installmentinstalment amounts or pays a part of purchase price on spot and the remaining in installmentsinstalments, as agreed.
|Treasury. The term stems from Islamic state treasury in the olden times.
|Dhimma / Zimma
|The capacity to accept obligations and duties, including financial obligations.
|A Sharia opinion presented to a person who seeks it with regard to an incidence that has already occurred (the Fatwa incidence) or is expected to occur. It does not refer to answering queries pertaining to hypothetical incidences.
|Knowledge of Sharia rulings on practical matters of day to dayday-to-day life derived from the detailed Sharia evidences.
|Element of ignorance, uncertainty and deception in a financial transaction.
|Sayings and acts of, by the Holy Prophet Mohammed (peace be upon him) which also include the Prophet’s consent and/or disagreement on acts of the companions.
|Goods/commodities, actions and deeds which are permissible under Sharia.
|Goods/commodities, actions and deeds which are not permissible under Sharia
|Hawala (of Debt)
|Hawala of debt is the transfer of debt from the transferor (Muheel) to the payer (Muhal Alaihi). The transfer of right, on the other hand, is a replacement of a creditor with another creditor. The transfer of debt differs from transfer of right in that in transfer of debt a debtor is replaced by another debtor, whereas in a transfer of right a creditor is replaced by another creditor.
|Ijara is a contract of leasing of a property or asset having legitimate usufruct or benefit (or in other words sale of usufruct of a property or asset for a specified period) whereas the use of property is for a Sharia compliant purpose and the rent is paid by the lessee to the lessor in a permissible manner.
|Ijara Muntahiya Bittamleek
|It is not different from an Ijara contract except that upon completion of lease term the lessor may sell the leased asset to the lessee on an agreed price by way of a separate independent sale contact entered into between both parties at the time of actual sale. Such sale may be entered into relying on a unilateral promise to sell by the lessor or a unilateral promise to purchase by the lessee with a defined exercise price on certain terms and conditions given by the promissor whereas each promise will be applicable in circumstances different from each other.
|Intellectual effort by qualified Islamic jurists to derive a rule of law from sources of Sharia on any new situation. Ijtihad is based on the evidences found in Quran, Hadith, Sunnah, Scholars’ Consensus (Ijma) and Qiyas (analogy).
|Hoarding of wealth without fulfilling one’s legal and moral obligations, such as paying Zakat.
|Istisna is a contract for sale of specified asset or item to be manufactured or constructed on spot or deferred payment terms. In this contract, the seller delivers to the purchaser an asset or item as per the specifications given by the purchaser on an agreed future date with the permissibility that the seller may manufacture or produce the asset by itself or by a third party.
|Ignorance, uncertainty or lack of knowledge about essential details of a contract.
|Ju`ala is a contract in which one of the parties (the Ja`il) offers specified compensation (the Ju`l) to anyone (the `Amil) who will achieve a determined result in a known or unknown period.
|Usufruct benefit or utility attached to an asset or property leased for a specified period.
|Giving a productive asset to a needy person free of cost for certain period of time with the right to derive financial benefit from its usage, e.g. a taxi.
|Mudaraba (Investment contract based on Fund Management)
|Mudaraba is the partnership in profit whereby one party provides capital and the other party provides labour, efforts or expertise. Profit is shared between both parties as per agreed ratios whereas the loss, if any, is borne by the fund provider (Rab Al Mal) alone provided such loss is due to circumstances which are unavoidable, uncontrollable and unforeseen by the fund manager (Mudarib), else the loss will be borne by the fund manager (Mudarib) alone because of his default.
|Entrepreneur or the fund manager in a Mudaraba transaction.
|Murabaha (Cost-plus profit Sale)
|A sale contract in which a purchaser describes goods to the seller and provides an irrevocable and legally enforceable promise to purchase the described goods from the seller at cost plus agreed profit once the seller purchases the identified goods from a third party supplier for seller’s account relying on purchaser’s promise. It is permissible that the profit is defined on a floating rate or a benchmark basis provided that at the actual time of sale of goods by the seller to the purchaser, the profit is a known and fixed amount.
|A contract in which the owner gives a worker access to trees that he maintains and waters, with the fruits being shared between the owner of the trees and the worker.
|Sale of goods based on negotiation, i.e. without disclosing cost and profit.
|Musharaka (Venture Capital)
|Musharaka is a contract of partnership between two or more partners and is classified into many categories most common and popular of them are the following two: Sherkat Al Aqd (Contractual Partnership) It is an agreement between two or more parties to combine their assets (in kind or in cash) or to merge their services or future obligations and liabilities with the aim of making profit through Sharia compliant means whereas the profit is distributed between the partners as per the agreed ratios however the loss, if any, shall be born by all partners proportionately. Sherkat Al Melk (Partnership of Ownership) It is the combination of the assets of two or more persons which results in entitlement by each partner to the profits or revenues therefrompersons, which results in entitlement by each partner to the profits or revenues therefrom, or appreciation in value thereof in proportion to the ownership of each partner and in bearing the loss accordingly, if any. A Sherkat Al Melk is formed either by events beyond the partners’ control such as inheritance or by choice such as acquisition of a common undivided share in an asset by two or more partners or by acquisition of an undivided share by one person in an asset fully owned by the other.
|Lessee (also employer who leases the services of an employee)
|It is a contract in which a person agrees to till the land of the other person in return for part of the produce, when ready.
|Nisab (of Zakat)
|Minimum limit of wealth held by a person to become liable for payment of Zakat. The limit is different for different types of wealth, goods, livestock and agricultural produce.
|Parallel Istisna is a contract not different from Istisna except that it is entered into by the seller of an Istisna contract with a third party in capacity of the seller as purchaser and the capacity of the third party as seller. The specifications of the asset to be manufactured or constructed by the seller of a parallel Istisna contract are similar to that of the Istisna contract. Istisna contract and a parallel Istisna contract should not be dependent on or interconnected to each other.
|Parallel Salam is a contract not different from Salam except that it is entered into by the purchaser of a Salam contract with a third party in capacity of the purchaser as seller and the capacity of the third party as purchaser. The specifications of the goods to be sold by the seller of a parallel Salam contract are similar to that of the Salam contract. A Salam contract and a parallel Salam contract should not be dependent on or interconnected to each other.
|Qard Hasan (Benevolent loan)
|A contract of benevolent loan entered into between a lender and a borrower free of any interest or service charge or an access for the benefit of lender and repayable either on agreed future date/s or on demand of the lender, if agreed so.
|Rabb Al Mal
|Fund provider in a Mudaraba transaction.
|Taking an asset as insurance against a debt, whereby the debt may be extracted from the held property if it is not repaid.
|Riba/Riba’ An Nisi’ah (Interest or Usury)
|Monetary gain on funds (capital) given as loan at a predetermined rate for a specified period. In other words, it is an increase obtained by the lender as a financing condition. Interest and Usury is one and the same and is prohibited in Islam in all forms, either monetary or non-monetary.
|Riba al Fadl
|A sale transaction in which a commodity is exchanged for the same commodity but with higher quantity. The delivery of higher quantity is deferred by an agreed period. This is also a kind of Riba and is prohibited in Sharia.
|Almsgiving or an act of voluntary spending of money in various charitable ways, over and above one’s obligation to pay Zakat.
|Salam is a contract of sale of goods which are described with precise and undisputable specifications on a basis that the sale price should be paid by the purchaser in lump sum on the date of signing of the Salam contract while the described goods shall be delivered by the seller on a fixed and agreed future date.
|The exchange of one monetary form for another in the same or different genera, i.e. gold for gold coins, silver for silver, gold for silver, silver for gold, etc., whether it is in the form of jewellery or minted coins or paper currencies etc.
|The law of Islam as distinguished from Fiqh, which is the knowledge or jurisprudence of this law.
|Sukuk are certificates of equal value representing undivided shares in ownership of tangible assets, usufruct and services or (in the ownership of) the assets of particular projects or special investment activity, however, this is true after receipt of the value of the sukuk, the closing of subscription and the employment of funds received for the purpose for which the sukuk were issued.
|Islamic Insurance is an agreement of some persons facing certain types of risk, to remedy the losses raised from those risks, by paying subscriptions on the basis of commitment for donation, with this amount will be established an insurance fund, that will have its own juristic personality, and with separate financial liability, from this fund the compensation will be done for the losses that affect any subscriber due to insured risks took place, and it will be done according to bylaws and documents. This fund will be managed by a committee selected among the documents holders, or by a stock company with certain charges, that will carry out the management of insurance related works and the investment of stocks of the fund.
|Certain percentage (usually 5 or 10%) from the agricultural produce payable by a farmer as part of his religious obligation.
|Wakala is a contract of agency in a permissible act whereby a principal (Muwakkil) appoints the agent (Wakeel) as its nominee or representative to perform a defined Sharia compliant activity on behalf of the principal at a fee or without fee. A Wakala contract may be general or specific and for a limited tenure or for an unlimited tenure.
|An act of endowment or dedication of asset(s) by way of keeping the asset on hold while distributing its benefits or returns among defined beneficiaries.
|Zakat Al Fitre
|A nominal amount (in form of cash or kind) payable by every Muslim (even a new born child) who can afford, at the end of Ramadan (the month of fasting) but before Eid Al Fitre prayers.
|Zakat Al Mal
|An obligatory levy payable by a Muslim persons having wealth above a defined limit i.e. Nisab, at a rate fixed by the Sharia. According to the Islamic belief Zakah purifies wealth and souls. It is levied on savings, jewellery, livestock, agricultural produce, minerals, invested capital, etc.
Source: Dubai Islamic Bank