Glosssary of Islamic Banking Terms

Aqad : Contract, consisting of all tenets of a contract
Bai Ad-Dayn : Sale of Debt
Bai Bithaman Ajil : Deferred Payment Sale, over a period of time
Bai Inah : 2-party Sale (for Cash)
Bai Salam : Trust Sale
Fatwa : Edict, opinion or judgement based on religious sources scholarly discussion
Gharar : Uncertainty, unmitigated risk
Hadith : Sayings of the Prophet as recorded
Halal : Permissable, Clean & Pure
Haram : Prohibited
Hibah : Gift
Hilah : Trick (contractum trinius)
Hiwalah : Remittance
Ibadah : Worship

Ibra & rsquo; : Rebate
Ijab : Offer (tenets of a contract)
Ijarah : Rent
Ijarah Mausufah Fi Zimmah : Forward Lease
Ijarah Muntahiah Bi Tamlik : Rental with intention to own
Ijarah Thumma Al Bai : Rent with eventual sale (Hire-purchase)
Istijrar : Staggered sale (time-to-time sale)
Istina’a : Order
Jualah : Service Charge
Kafalah : Guarantee
Maisir : Unearned income, unfair income (part of gambling)
Muamalat : Man-to-Man transaction
Mudharabah : Profit Sharing. Commonly for investments.
Mudharib : Entrepreneur, in a Mudharabah transaction
Murabahah : Cost-plus sale (financing)
Musawamah : Simple Sale
Musyarakah : Partnership, Joint-venture
Musyarakah Mutanaqisah : Diminishing partnership
Nasi’ah : Delay (used in relationship in delay of payment of money)
Qabul : Acceptance (tenets of a contract)
Qardh : Loan
Qardhul Hassan : Benevolent Loan
Qimar : Gambling
Rab Ul Maal : Capital providers, Fund owner
Rahn : Collateralised debt (pawn broking)
Riba’ : Usury (interest)
Sarf : Exchange of foreign currency
Shariah : Law (Islamic) literal definition – way, path
Shirkah : Partner
Sukuk : Certificates (Securitised Assets)
Sunnah : Actions of the Prophet as recorded
Takaful : Mutual assistance
Tawarruq Murabahah : Tripartite Cost-plus Sale
Ujrah : Compensation / Service Charge
Yad Amanah : With Trust (used with Wadiah)
Yad Dhamanah : With guarantee (used with Wadiah)
Waad : Promise
Wadiah : Safe Custody
Wakalah : Agency
Waqaf : Benevolent Endowment (no human ownership)