Zawya - Glossary

A	Phonetic Spelling	Arabic	English	Definition
	Abu Hanifa	أبو حنيفة	Abu Hanifa	Pre-eminent second/eighth century jurist (faqih) of Iraq after whom the Hanafi madhhab is named.
	Ahmad Bin Hanbal	أحمد بن حنبل	Ahmad bin Hanbal	Third/ninth century pre-eminent jurist (faqih) and hadith specialist after whom the Hanbali madhhab is named.
	Ajeer	أجير	Hired worker	A hired worker.
	Ajr	أجر	Fee	Commission, fees or wages charged for servies rendered or work done.
	Al Ajr Al Mutaaref Alayh	الأجر المتعارف عليه	Prevailing rate	The price that is normally paid for a given service.
	Akl Al Batil	أكل الباطل	Unlawful acquisition of wealth	Qu’ranic term used to describe the process of acquiring wealth illegally such as theft and fraud.
	Ajeer Khas	أجير خاص	Private hired worker	A hired worker contracted to perform a specific task in a specific amount of time by one party, such as a cook or a servant.
	Ajeer Mushtarak	أجير مشترك	Joint hired worker	A worker, such as a tailor, who offers his services to many and thus may be contracted by several clients at once.
	Awraq Malyah Mutaathera	أوراق مالية متعثرة	Distressed securities	Securities of companies or government entities that are either already in default, under bankruptcy protection, or in distress and heading toward such a condition.
	Al Shafi (Imam)	الشافعي	Muhammad bin Idris al Shafi`i	Pre-eminent late third/ninth century jurist (faqih) after whom the Shafi`i madhhab is named.
	Amana	أمانة	Deposit in trust	A widely applied term in fiqh that refers to anything in the safekeeping of another that must be guarded and preserved. One of two basic relationships toward property, entailing bearing the risk of its loss, the other being daman. Amana entails absence of liability for loss except in breach of duty. In some Islamic banks, current accounts are regarded as amana.
	Amin	أمين	Trustworthy/ Trustee	Safeguarder of others' entrusted property as if it were his own; not liable in case of any damage to the trust property without any negligence on his part.
	Amin Al Amm	الأمين العام	Trustee (of a general trust)	One who has been entrusted with the property of another for a reason other than safe-keeping (wadi`a), such as a tenant who rents an apartment or the mudarib in the mudaraba contract.
	Amlak	أملاك	Possessions	Any valuable thing such as wealth, money and property that can be possessed.
	Amlak Shariya	أملاك شرعية	Legal assets	Goods or assets the use of which is lawful under Islamic law, or wealth that has a commercial value. Legal tenders or rights to property that carry monetary value are also included. Certain items may have commercial value but are considered non- valuable for Muslims, such as wine and pork products.
	Al Arbah Qabl Khasm Al Fawaed Wa Ad Daraeb Wa Al Ihlak Wa Estihlak Ad Dayn	الأرباح قبل خصم الفوائد والضرائب و الإهلاك و إستهلاك الدين	Earnings before interest, tax, depreciation and amortisation	Net income with interest, taxes, depreciation and amortisation added, which is used to analyse and compare profitability between companies and industries.
	Ardh	أرض	Land	Land.
	Ashbah An Nuqud	أشباه النقود	Quasi money	Highly liquid assets that can be turned into cash.
	Ashom	أسهم	Shares	A unit of ownership interest in a corporation or financial assets.
	Asnaf Ribawiya	أصناف ربوية	Ribawi commodities	The six substances sold by weight and measure (gold, silver, dates, wheat, salt and barley) that, when exchanged in kind, must be exchanged in equal measure and with immediate transfer of possession, to avoid riba in trade (see ‘riba al fadl’). If these conditions are not met, then the exchange is considered to be riba.
	(Al) Asshom (Al) Qiyadiya	الأسهم القيادية	Blue chips	The stock of a company with a national reputation for quality, reliability and the ability to operate profitably in good times and bad.
	Ayah	آية	Verse	(Orig. ‘sign’) The term refers to a passage from the Holy Qu’ran.
	Adady	عددي	Countable items	Things measured in individual units rather than by volume, weight or length.
	Adl	عدل	Justice	A general term meaning justice, equity and fairness. In rahn transactions, the person agreed upon as the custodian of the collateral.
	Al‘aed Almatlub Ala Huquq Al Musahimeen	العائد المطلوب على حقوق المساهمين	Cost of equity	The minimum rate of return a firm must offer shareholders to compensate for waiting for their returns, and for bearing some risk.
	Al‘aed Ala Al Usul	العائد على الأصول	Return on assets	An indicator of how profitable a company is relative to its total assets.
	Alaed Ala Huquq Al Musahimeen	العائد على حقوق المساهمين	Return on equity	A measure of the rate of return on the ownership interest (shareholders' equity) of the common stock owners.
	Ain	عين	Determinate property	Property that is not dayn; the commodities of material value in themselves. Plural: a’ayan.
	Alawa Seariya	علاوة سعرية	Premium or payment	The difference between the higher price paid for a fixed income security and the security's face amount at issue.
	Ameel	عميل	Agent	One who performs a task and deserves compensation for that task, such as the mudarib in a mudaraba contract or a zakat collector.
	Aamel	عامل	Worker	A worker, such as a tailor, who offers his services to many and thus may be contracted by several clients at once.
	Aof	عوف	Surplus wealth	A Qu’ranic term meaning surplus wealth.
	Aqar	عقار	Real estate	Immovable property such as land and buildings.
	Aqd	عقد	Contract	A central term in Islamic financial commercial jurisprudence that essentially means ‘contract’.
	Aqd Al Musaqa	عقد المسافة	Fruit farming partnership	A type of partnership in which the owner of an orchard agrees to share a stipulated portion of the produce of the orchard's trees with a worker, in exchange for the latter's irrigation of the garden.
	Aqd Batil	عقد باطل	Void or invalid contract	A contract most likely involving some illegal external attributes like the involvement of riba, gharar or qimar.
	Aqd Ghair Mulzim	عقد غير ملزم	Revocable contract	A contract which any party has the right to revoke without the consent of the other.
	Aqd Mawquf	عقد موقوف	Suspended Contract	A contract, the effectiveness of which is suspended until the occurrence of a specified action or event.
	Aqd Muawadha	عقد مقاوضة	Commutative contract	Bilateral exchange contract classification in Islamic fiqh muamalat, in which each of the contracting parties gives and receives an equivalent countervalue, such as a sale, purchase or lease contract. Antonym: non- commutative/tabaru'.
	Aqd Mubadala	عقد مبادلة	Swap contract	A derivative contract in which counterparties exchange certain benefits of one party's financial instrument for those of the other party's financial instrument. These include contracts to exchange only the periodic interest (or coupon) payment from different types of bonds (interest rate swap). Specifically, the two counterparties agree to exchange one stream of cash flows against another stream. These streams are called the legs of the swap. The swap agreement defines the dates when the cash flows are to be paid and the way they are calculated. Usually at the time when the contract is initiated at least one of these series of cash flows is determined by a random or uncertain variable such as an interest rate.
	Aqd Mulzim	عقد ملزم	Irrevocable contract	A contract which neither party can revoke without the consent of the other.
	Arboun	عربون	Earnest money/ Down payment	A contract of sale, including the sale of usufruct, by means of an advance payment which is accounted as a part of the purchase price if the buyer decides to complete the sale, or which becomes the property of the seller if the sale is not completed. As such, an `arboun is a contract of sale in which the seller is compensated for honouring the obligation to cancel the sale if the buyer chooses to do so. The term `arboun is also used to denote the advance payment itself.
	Ardh	عرض	Offer	Offer in a contract.
	Ariyat Al Aayan	عارية الأعيان	Gratuitous loan of objects	Loan of a particular piece of property without anything taken in exchange. In other words, it is the gift of usufruct of a property or commodity that is not consumed on use.
	Ariyat Al Manafe	عارية المنافع	Gratuitous loan of usufruct	A term referring to palm trees that have been set aside by their owners, for a fixed period of time such as a year, for the needy to feed themselves with its fruit. This practice is mentioned in the hadith as an exception to the Prophetic prohibition of the muzabanah sale. While the people of Madina were forbidden from selling fruit on the tree for dried fruit – ostensibly because of the gharar inherent in such a transaction – the Prophet Muhammad (pbuh) provided a dispensation in the case of `araya, allowing the poor who possessed dried dates to sell them to tree owners for access to the fruit on certain fruit trees for a year.
B	Phonetic Spelling	Arabic	English	Definition
	Bay Al Ajil Bil Ajil	بيع العاجل بالأجل	Sale with delayed delivery or payment	A type of sale in which the sale price is paid immediately and delivery of the sale item is delayed, or one in which the sale price is deferred and the sale item is delivered immediately.
	Bayas Salaf	بيع السلف	Prepaid sale	Another name for salam, where the price of the commodity is paid in advance while the commodity or the counter value is supplied in future; thus the contract creates a liability for the seller. Amount given as salaf cannot be called back, unlike qard, before it is due.
	Bay As Salam	بيع السلم	Deferred delivery sale	The sale of fungible goods to be delivered in the future for a price to be paid in the present.
	Bay As Sarf	بيع الصرف	Exchange of currency	Sale of gold, silver or monetary units on both sides.
	BayAtan Fi Baya	بيعتان في بيعة	Two sales in one	A type of transaction that was explicitly prohibited by the Prophet Muhammad (pbuh). The meaning of the expression “two sales in one” is explained by the fuqaha' in various ways.
	Bay At Tawliya	بيع التولية	Sale at cost price	Sale at cost price to facilitate or serve others.
	Bay Al Arbun	بيع العربون	Sale with a non- refundable down payment	A sale of down payment with the condition that if the buyer takes the commodity, the down payment will become part of the selling price, and if he does not purchase the commodity, the advance money will be forfeited.
	Bay Al Ghaeb	بيع الغائب	Secret/Absent sale	Sale of absent or concealed goods.
	Bay Al Khiyar	بيع الخيار	Sale with option	Sale with an option of one party to rescind the contract within a specified time.
	Bay Al Hasah	بيع الحصاة	Pebble sale	A type of sale practiced by the Arabs in the Jahiliyyah and prohibited by the Messenger of Allah in which the sale was determined by the casting of pebbles. Classical commentators mention three forms of the husah sale: 1) the seller would say to the would-be purchaser, "when I throw the pebbles in my hand, then the deal is closed and binding on you," 2) the seller would say to the would-be purchaser, "I shall sell you the commodity which your pebbles hit" or 3) in a land sale, the seller would say, "I shall sell you the plot of land whose dimensions are defined by the extent to which you throw this pebble". The husah sale – like the habal al habalah sale was ostensibly prohibited because of the gharar that characterised the contract that governed it.
	Bay Al Ina	بيع العينة	Sale of appearances	A sale in which a purchaser buys merchandise from a seller for a stipulated price on a deferred payment basis and then sells the same merchandise back to the original seller for a price lower than the original purchase price on cash basis, the net effect of which is a loan with interest. This practice is allowed in Malaysia but considered an illegal stratagem/trick (hiyal) in all other jurisdictions.
	Bay Al Istijrar	بيع الاستجرار	Master supply sale contract	See ‘istijrar’. Purchasing goods from time to time in different quantities.
	Bay Al Kali Bil Kali	بيع الكالئ بالكالئ	Forward sale/ The exchange of a delayed counter value for another delayed counter value	The term ‘kali' refers to something delayed. A type of sale that the Prophet Muhammad (pbuh) is reported to have prohibited. In the context of Islamic law, this refers to an important maxim agreed upon as ijma, which forbids the exchange of a delayed counter value for another delayed counter value, i.e. sales in which both legs of the transaction are deferred.
	Bay Al Khuluw	بيع الخلو	Sale of concession/Sale of right	(Lit. evacuating) Right/concession to utilise property for a set price and a period of time in addition to rent paid in a leasing contract. For instance, right to utilise furniture in a leased building for 10 years or right to lease property for 100 years.
	Al Bay Al Muallaq	البيع المعلق	Suspended sale	A sale transaction, the effectiveness of which is related to any future condition or action.
	Bay Al Murabaha	بيع المرابحة	Mark-up/Cost plus sale	Sale at cost price plus a mutually agreed profit – bargaining on the profit margin on the cost price (a type of trust sale or bay' al amanah). Originally a term describing any sale in which the seller sells his merchandise for more than the price at which he acquired it, the term ‘murabaha’ is now used in contemporary Islamic finance to describe a financing scheme in which a financial institution, usually a bank, agrees to purchase merchandise for a client provided that the client promises to purchase it from the financial institution at an agreed upon mark-up. This transaction, called simply murabaha or murabaha financing, is widely used in contemporary Islamic finance.
	Bay Al Musawama	بيع المساومة	Negotiated sale	Sale without any reference to the cost price to the seller – bargaining on price. A simple sale in which the price of the commodity to be traded is negotiated by the seller and the buyer without any reference to the price paid or cost incurred by the former.
	Bay Al Wadhia	بيع الوضيعة	Discount sale	Sale with loss – at a price less than cost price. Any sale in which the seller sells his merchandise for less than the price at which he acquired it. The purchaser is informed about the discount and the original acquisition cost (one type of trust sale/bay’ al amanah).
	Bay Al Wafa	بيع الوفاء	Repurchase option	See ‘(bay' bil) wafa’.
	Bayt Al Mal	بيت المال	Treasury of the Muslim community	An institution developed by the early Caliphs for the administration of taxes in Islamic states and the provision of support for the needy. Although now obsolete, modern Islamic economists deem the institutional framework appropriate for contemporary Islamic societies.
	Bay Bi Thaman Ajil	بيع بثمن أجل	Deferred payment sale	A transaction in which goods are requested by a client, purchased by the bank and then sold to the client at an agreed upon price that includes the bank's mark-up. Often the client is offered the option of paying in instalments. This is essentially identical to the murabaha financing used throughout the Islamic banking sector.
	Bay Bil Wafa	بيع بالوفاء	Redemption sale	Sale with the right of the seller to repurchase the property by refunding the purchase price. Most legal schools hold such a sale to be impermissible as the intention of the seller is not to relinquish ownership but rather to use the alleged sale as a means to monetise an asset through collusion with the buyer.
	Bay Muajjal	بيع مؤجل	Deferred payment sale	A sale in which payment is delayed and delivery of the contracted goods is immediate. This financing technique has been adopted by Islamic banks and combined with the murabaha contract to form murabaha muajjal. This contract allows the seller to earn a profit margin on his purchase price and allows the buyer to pay the price of the commodity at a future date in a lump sum or in instalments. The seller has to expressly mention the cost of the commodity and the margin of profit is mutually agreed. The price fixed for the commodity in such a transaction can be the same as the spot price or higher or lower than the spot price.
	Bramej Al Wala	برامج الولاء	Loyalty programmes	Structured marketing efforts that reward loyal buying behaviour.
D	Phonetic Spelling	Arabic	English	Definition
	Daf Muqaddam	دفع مقدم	Advance payment	Present payment for deferred delivery.
	Daeef	ضعيف	Weak	Used to describe a hadith whose transmission is defective so that its authenticity is in question.
	Daman	ضمان	Contract of guarantee, security or collateral	Responsibility for financial coverage in the case of destruction or damage. One of two basic relationships toward property, entailing bearing the risk of its loss; with the other being amana.
	Daman Al Iktitab	ضمان الاكتتاب	Underwrite	Practice used to assess the eligibility of a customer to receive a financial services provider’s products.
	Dayn	دين	Debt	A fiduciary obligation that comes into existence as a result of a contract or credit transaction incurred by way of rent, sale or purchase.
	Bay Aldayn	بيع الدين	Sale of debt or receivables	The transfer of debt for cash or another commodity at its par value (hawalat al haqq/right transfer). See entry for ‘dayn’. With the exception of Malaysian Shafi'i scholars, the majority of scholars agree that debt cannot be sold.
	Dhimma	ذمة	Liability	A basic term in fiqh al mu`amalat that roughly corresponds to the concept of liability. A debt is said to be ‘established in someone's dhimmah’ if he is in debt to someone else. The concept of dhimmah may be likened to a personal ledger book that is constantly being filled with rights and obligations, such as the obligation to repay someone.
	Dhulm	ظلم	Injustice	Usurping others’ rights; not giving proper recompense in an exchange by way of any illegal act or coercion.
	Dinar	دينار	Dinar	A gold coin used by Muslims throughout Islamic history. The standard mass of the dinar that is referred to in fiqh is one mithqal (approximately 4.25g).
	Dirasat Al Jadwa Al Iqtisadiya	دراسة الجدوى الافتراضية	Feasibility study	A comprehensive analysis of a project's economics used by the banking industry for financing purposes.
	Diya	دية	Compensation	The compensation paid by one who commits manslaughter or unintentional homicide to the relatives of the deceased.
F	Phonetic Spelling	Arabic	English	Definition
	Faqih	فقيه	Muslim jurist	A Muslim who is an expert in fiqh; a Muslim who is knowledgeable of the rules of the Shari’a and knows how these rules are related to the source texts upon which they are based.
	Faqir	فقير	Destitute	One who lacks the means to support himself, who has neither the wealth nor the skills required to do so.
	Fardh	فرض	Obligatory	Compulsory or obligatory religious duty, the denial or omission of which is considered a sin.
	Fardh Kifaya	فرض كفاية	Collective obligation	A duty or obligation that extends collectively to the Muslim community, but not to specific individuals. If no one carries out this obligation, then it is the collective responsibility of the entire community to appoint individuals to perform such services. In the case of Islamic law and finance, it is the obligation of Shari’a scholars to perform the duty on behalf of the community.
	Fasid	فاسد	Unsound, foul, not viable	An impermissible term in a contract that renders the contract invalid.
	Faskh	فسخ	Dissolution of a contract	A term used by the classical fuqaha to refer to the dissolution of a contract or agreement. It has been described as the cancellation of a contract, such that affairs return to the state in which they were before the closing of the contract, without any addition or subtraction. Many of the classical fuqaha' apply the term to instances in which a previously valid (sahih) contract is cancelled voluntarily by the contractual parties, such as in iqalah, khiyar al`ayb (option to return in case of a defect) and khiyar al shart (stipulated option of return), and use the term infisakh for cancellations that occur outside of the will of each of the contractual parties – such as the cancellation of a sale contract when the sale item is destroyed, before the seller can hand it over to the purchaser or the dissolution of certain partnerships upon the death of one of the participating parties.
	Fatwa	فتوى	Religious opinion concerning Islamic law	A formal response issued by an expert faqih.
	Fiqh	فقه	Islamic jurisprudence	The practical jurisprudence/science of the Shari’a or human articulations of divine rules encompassing law and ethics. Fiqh completes the Shari’a since it provides supplemental legal reasoning, where direct rules are not available in the Shari’a.
	Fiqh Al Muamalat	فقه المعاملات	Transactional jurisprudence	Islamic discipline concerned with the jurisprudence of financial transactions.
	Fuduli	فضولي	Uncommissioned agent	Agent is described as ‘fuduli’ whenever it transacts (e. g. sells, rents, etc.) with someone else’s property without the permission of the owner through a formal agreement of agency. For example, if a person were to negotiate and “close” a deal with a buyer in which he sold some machinery without the owner of the machinery having made him his wakeel (authorized representative) the ‘seller’ would be described as fuduli.
	Fuquha	فقهاء	Jurists	Qualified specialists in fiqh or Islamic jurisprudence.
G	Phonetic Spelling	Arabic	English	Definition
	Ghubn	غبن	Deception	Price deception (where the sale price is much greater than the market price and the buyer is reliant on the honesty of the seller). This may lead to cancellation of contract.
	Aqd Ghair Mulzim	عقد غير ملزم	Non-binding contract	A non-binding contract which any party has the right to revoke without the consent of the other.
	Gharar	غرر	Contractual ambiguity	An element of ambiguity or ignorance either through ignorance of an essential element of the goods, the price, or through faulty description of the goods, in which one or both parties stand to be deceived.
	Gharim	غارم	A debtor (who does not possess the funds to pay his debt)	One whose funds, after repayment of a debt, would not equal the nisab, according to the Hanifi jurists. The Shafi`i and Maliki jurists divide the gharimun into two types: those who incurred debts for their own benefit and those who incurred debts for the benefit of others. The gharimun are one of the eight groups mentioned in the Qu’ran as legitimate recipients of zakat funds.
	Ghasb	غصب	Wrongful seizure of property	The wrongful appropriation of property by force.
	Ghasib	غاصب	Usurper	Usurper of property of others.
	Al Ghunm	الغُنم	Gain may be realised only when there is a risk of loss	This Shari’a maxim provides the rationale behind the principle that earning profit can only be legitimised by engaging in a risk sharing economic venture and thereby contributing to the economy. See also ‘al kharaj bil daman’.
H	Phonetic Spelling	Arabic	English	Definition
	Hamil Hisab Istithmar	حامل حساب الاستثمار	Investment account holder	An investor who places funds with an Islamic bank for investment purposes on a profit and loss sharing mudaraba basis. An Islamic investment account offers no capital guarantee and no returns/distribution guarantee. Returns are derived from the profit earned on the investment less management/ mudarib fees, profit equalisation reserve (PER) and investment risk reserve (IRR) extractions. Funds can be placed at different maturities with the returns varying based on tenure. IAHs can be classified into restricted (RIAH or R-PSIA) and unrestricted types (UIAH or U-PSIA).
	Habal Al Habala	حبل الحبلة	Uncertain outcome agreement	A type of sale practised by the Arabs during the Jahiliyyah, in which the agreement between the two transacting parties depended on a pregnant she- camel giving birth to a female calf that would subsequently become pregnant itself. The habal al habala transaction was prohibited by the Prophet, according to several well-known reports, ostensibly because of the extreme uncertainty (see ‘gharar’) in the essence of the contract, given that neither of the contractual parties could be even remotely certain that a pregnant she-camel would successfully give birth to a another she-camel, which would subsequently mature and become pregnant itself.
	Hadith	حديث	Report of the sayings or actions of the Prophet Muhammad (pbuh) or his companions	A report of an utterance, deed, affirmation or characteristic of the Prophet Muhammad (pbuh). The ahadith are the source texts by which the Sunnah is preserved. Plural: ahadith.
	Al Hajz Ala Al Ruhunat Al Aqariya	الحجز على الرهونات العقارية	Foreclosure	The legal process by which a mortgagee obtains a court ordered termination of a mortgagor's equitable right of redemption.
	Halal	حلال	Lawful	A deed permitted by Allah. Antonym: haram.
	Hamish Jiddiya	هامش جدية	Security deposit	Collateral given for the promise to purchase. If the buyer does not proceed to purchase, the seller can demand compensation for the actual damage. If the collateral is higher, the buyer receives an amount back; if the actual damage is higher, the the seller can demand additional compensation above the collateral.
	Haqq Ash Shufa	حق الشفعة	Right of pre-emption or right of first refusal	The right of pre-emption in sales transactions; for example, in a real estate sale, a neighbour will have the right of first refusal; in some cases, the neighbour will have the right to force the seller to sell him all or part of the real estate in the event of a sale.
	Haqq	حق	Fiscal right	A term signifying a right that a party possesses, for example the creditor’s right to payment.
	Haqq Maliy	حق مالي	Fiscal right	Rights relating to financial assets/wealth, such as haqq dayn (debt rights) and haq tamalluk (ownership rights).
	Haqq Tamalluk	حق تملك	Right of ownership	A tradable asset in the form of ownership rights.
	Haram	حرام	Unlawful	Impermissible, unlawful. Antonym: halal.
	Hawala	حوالة	Debt transfer	An agreement whereby a debtor is freed from the obligation to repay a debt by a third party becoming responsible for it, or the transfer of the claim of a debt shifting from one person to another. The jurists of the Hanafi madhhab divide hawala into two categories: unrestricted (mutlaqa) and restricted (muqayyada), in which the final payment must come from the funds of the original debtor, whether from some debt that someone owes him or some funds that are in the possession of the party to which he refers them.
	Hawl	حول	Lunar year	A term used by jurists to describe the amount of time that must pass before a Muslim in possession of funds equalling or exceeding the exemption limit (nisab) must pay zakat on his wealth. In the case of cash, gold and silver, it is one Islamic year (i.e. a lunar year of approximately 354 days).
	Hiba	هبة	Gift	A gift donated without expectation of a return or benefit.
	Hila	حيلة	Legal stratagem	Ruses used in transactions to circumvent basic Islamic legal prohibitions. A transaction structured to appear permissible, but which in fact circumvents the Shari’a. For example, a contract of sale that is matched to a contract selling the same goods back to the original seller at a higher price. The two sales are individually permissible but when combined together are, in substance, a loan of money with an increment/interest.
	Himaya Tijariya	حماية تجارية	Protectionism	Restraining trade between states to prevent foreign takeover of domestic markets.
	Hisba	حسبة	Marketplace regulation	A term used to describe marketplace regulation, which is carried out by the Islamic authority (often called the muhtasib). Historically, various Islamic rulers have undertaken this duty, supervising activities ranging from the inspection of eateries for sanitary conditions to the investigation of fraud.
	Hissabat Al Wadae Bi Nidham Al Murabaha Fi Assela Al Awaliya	حسابات الودائع بنظام المرابحة في السلع الأولية	Commodity murabaha deposit	A Shari’a-compliant investment deposit whereby deposits are invested in the buying and selling of commodities.
	Hissab Khas	حساب خاص	Escrow account	A trust account held in a borrower's name to pay obligations such as property taxes and insurance premiums.
	Hukum	حكم	Ruling	Plural: ahkam. In Fiqh, refers to the Shari'a classification of all acts into one of five categories e. g. obligatory (wajib/fard), recommended (mustahabb), neutral/ permissible (mubah), reprehensible (makruh), or forbidden (haram).
	Hukm Sharee	حكم شرعي	A Shari’a ruling	Law, value, ordinance or ruling of the Shari’a (e.g. obligatory, recommendable, neutral, reprehensible or forbidden) associated with any action.
I	Phonetic Spelling	Arabic	English	Definition
	Ibaha Asliya	إباحة أصلية	Presumed permissibility	The idea that all economic activities that are not prohibited by the original sources of Shari’a, i.e. the Qu'ran and the Sunnah, are presumed to be permissible.
	Ibraa	إبراء	Discharge	An act by a person to withdraw his rights, such as those to collect payment from a person who has the obligation to repay the amount borrowed from him.
	Ihtikar	احتكار	Hoarding	The prohibited practice of purchasing essential commodities and storing them in anticipation of an increase in price.
	Ihtiyati Ilzami Li Al Bunuk	احتياطي إلزامي للبنوك	Reserve requirements	A central bank regulation that sets the minimum reserves each commercial bank must hold to customer deposits and notes. Also known as cash reserve ratio.
	Ihtiyati Al Mukhatara Fi Al Istithmar	احتياطي المخاطرة في الاستثمار	Investment risk reserve	A type of reserve utilised by Islamic banks to subsidise the risk of capital loss to unrestricted investment account holders’ (UIAH) in mudaraba based profit sharing investment accounts (PSIA) arising out of ordinary commercial reasons. IRR comprises amounts appropriated out of the income of investment account holders after deduction of the mudarib’s share of income, to meet any future losses on the investments financed by the IAH.
	Ihtiyati Muadalat Al Ribh	احتياطي معادلة الربح	Profit equalisation reserve	A type of reserve utilised by Islamic banks to minimise fluctuations in the profit distributed to unrestricted investment account holders (UIAH) in mudaraba based profit sharing investment accounts (PSIA) and sometimes to provide distributions comparable to conventional deposit returns, in response to pressures to maintain a competitive rate of return. PER comprises amounts appropriated out of the gross income from the mudaraba to be available for smoothing returns paid to the investment account holders and the shareholders, and consists of a IAH portion and a shareholder’s portion.
	Ijab	إيجاب	Offer	An offer in a contract.
	Ijara	إجارة	Lease, rent or wage	The sale of a defined usufruct of any asset in exchange for defined compensation. In the context of Islamic finance, it refers to an arrangement under which one party leases equipment, buildings or other facilities to a client for an agreed rent.
	Ijara Mawsoofa Bi Al Dhimma	إجارو موصوفة بالذمة	Lease described with responsibility	A lease contract where the lessor undertakes to provide a well-defined service or benefit without identifying any particular units of assets rendering the related service. If a unit of the asset is destroyed, the contract is not terminated and the lessor provides another such unit. In contemporary Islamic finance, refers to a form of forward/future lease. A lessee enters into a contract with a lessor to lease an asset in the future. Upon completion/ construction and ownership of the asset by the lessor, it will be leased to the lessee. The lessor will have to repay all advance rentals if the asset was not manufactured or executed according to specifications laid down in the agreement. It is not a requirement of this type of lease that the rent should be paid in advance.
	Ijara Muntahiya Bi Al Tamleek	إجارة منتهية بالتمليك	Lease ending with ownership	See entry: ijara wa iqtina.
	Ijara Wa Iqtina	إجارة و اقتناء	Lease and possess	Lease-and-purchase transaction; a financing instrument utilised in contemporary Islamic finance in which a financier purchases reusable merchandise (e.g. airplanes, buildings, cars) and then leases them to clients in return for an agreed upon rental fee (to be paid for the length of the lease period) with an additional unilateral undertaking from the lessor to sell the merchandise at the end of the lease period. The underlying contract is ijara and all rules applicable to ijara have to be observed to ensure Shari’a compliance. Ownership is transferred through a separate contract of sale or gift.
	Ijma	إجماع	Consensus	The unanimous consensus of the Muslim Ummah on a given issue, usually as represented by the agreement of the jurists. Ijma' has traditionally been recognised as an independent source of law, along with the Qu’ran, Sunnah and Qiyas (analogical deduction), by most of the jurists.
	Ijmali Aqsat At Taamin Al Muktataba	إجمالي اقساط التمليك المكتتبة	Gross written premiums	The total premium written and assumed by an insurer before deductions for reinsurance and ceding commissions.
	Ijtihad	اجتهاد	Juristic interpretation	The process by which a qualified Islamic jurist (mujtahid) endeavours to arrive at the correct ruling on a given issue by reflecting on texts from the fundamental sources of the Shari’a: the Qu’ran and Sunnah. Express injunctions have no room for ijtihad. Implied injunctions can be interpreted in different ways by means of inference from the accepted principles of the Shari’a.
	Iktinaz	اكتناز	Hoarding	Hoarding essential goods in hopes of profiting from shorter supply and higher demand. Hoarding wealth; for example, hoarding by withholding zakat.
	Iktitab Al Mutajawaz	الاكتتاب المتجاوز	Oversubscribed	When the demand for an initial public offering of securities exceeds the number of shares issued.
	Iman	إيمان	Conviction, faith or belief	Acceptance and affirmation of Allah, His Books, His Messengers, His Angels, the Hereafter and Divine Decree.
	Infaq	إنفاق	Spending	(Qur.) Spending, normally in the path of Allah. Among the various praiseworthy types of infaq are spending on one's family, spending in preparation for jihad and feeding and clothing orphans and other underprivileged individuals.
	Iqala	إقالة	Cancellation of a contract	Mutually agreed cancellation of a contract; mutual termination.
	Iqtisad	اقتصاد	Economics	A term used in Modern Standard Arabic to denote the field of economics.
	Ishtirak	اشتراك	Partnering	Contract of partnership.
	Islam	إسلام	Submission to Allah	The worship of Allah (God) alone. Islam is shahadah (testifying that there is no god but Allah and that Muhammad [pbuh] is the Messenger of Allah); establishing salah (prescribed prayer); paying zakat (giving a portion of one's wealth to the needy); the sawm of Ramadan (fasting during the ninth month of the Islamic calendar); and Hajj (making a pilgrimage to the sacred precincts of Mecca once in a lifetime if one is able).
	Israf	إسراف	Extravagance, waste	Spending on lawful objects but exceeding moderation in quantity and quality; spending on superfluous objects while necessities are unmet; spending on objects that are incompatible with the economic standard of the majority of the population.
	Istihsan	استحسان	Juristic preference	Doctrine of Islamic jurisprudence that allows exceptions to strict legal reasoning, or guiding choice among possible legal outcomes, when considerations of human welfare so demand.
	Istihwadh	استحواذ	Acquisition	To seize, to take possession, to acquire.
	Istijrar	استجرار	Continuous purchase or supply contract	A sale contract between a client and a supplier, whereby the supplier agrees to supply a particular product on an on- going basis, for example monthly, at an agreed price and for payment to be made by an agreed mode.
	Istisna	استصناع	Manufacturing contract	A type of sale, similar to salam, in which the price is paid to the manufacturer by the purchaser for specified goods that are subsequently manufactured and delivered on a stipulated date.
	Istithmar	استثمار	Investment capital	Placing capital into productive enterprises or assets (or part thereof) with the expectation of gain, resulting either through productivity improvements or through the reciept of increased income.
	Ittifaq Miayari Li Hisabat Al Wadae Bi Nidham Al Wakala	اتنفاق معياري لحساب الودائع بنظام الوكالة	Standardised wakala deposit agreement	A Shari’a-compliant investment contract on the basis of investment agency that offers an alternative to the commodity murabaha structure for deposits. See ‘wakala’ or ‘wakala al istithmar’.
	Illah	علة	Occasioning factor/ratio legis	A feature of a legal situation under consideration by a jurist capable of serving as a starting point for an analogy, qiyas.
	Bay Al Ina	بيع العينة	Sale of appearances	A sale in which a purchaser buys merchandise from a seller for a stipulated price on a deferred payment basis and then sells the same merchandise back to the original seller for a price lower than the original purchase price on cash basis, the net effect of which is a loan with interest. This practice is allowed in Malaysia but considered an illegal stratagem/trick (hiyal) in all other jurisdictions.
	Iwad	عوض	Compensation	Recompense or equivalent countervalue in an exchange.
J	Phonetic Spelling	Arabic	English	Definition
	Jahala	جهالة	Ignorance	A lack of clarity, on the part of one or more parties to a contract, with regard to terms and conditions. Without clarity in these matters, the contract will be void.
	JuAla	جعالة	Reward fee	Rendering a service against reward; literally wages, pay, stipend or reward, also known as ju’l. Legally, it refers to doing any job or providing a service for achieving an objective which is not sure to be achieved for someone against a prize, fee or commission. Achievement of the end result is necessary for entitlement to the fee or prize.
K	Phonetic Spelling	Arabic	English	Definition
	Kafala	كفالة	Guarantee	Assumption of the responsibility for debt repayment; a standard Islamic transaction in which a guarantor (kafil) agrees to assume responsibility for the debts of a creditor (makful `anhu). Similar but not identical to hawala. Surety in Islamic law is the creation of an additional liability with regard to the claim, not to the debt or the assumption only of a liability and not of the debt.
	Kafil	كفيل	Guarantor	The party that assumes responsibility for repayment of the debts of another in a kafala relationship.
	Khabeer	خبير	Expert/Consultant	An expert who is consulted in situations that require an impartial, informed decision, such as the appraisal of property.
	Kharaj	خراج	Tax on agricultural land	A term used to describe a share of agricultural produce that is collected by the Caliphate and added to the bayt al mal. The term appears in a wider sense in a well-known hadith that came to constitute a basic principle of fiqh al mu`amalat: profit (kharaj) goes with liability (daman).
	Al Kharaj Bil Daman	الخراج بالضمان	Gain accompanies risk of loss	A widely referenced maxim utilised in Islamic commercial jurisprudence (fiqh al muamalat) sourced from the hadith which essentially states that the one who wishes to profit should bear some liability. See also al ghunm bil ghurm.
	Khatar	خطر	Dangerous risk	A kind of gharar – khatar will be involved if liability of any of the parties to a contract is uncertain or contingent, if delivery of one of the exchange items is not in the control of any party, or if the amount of payment is undetermined.
	Khida	خداع	Deception	Deception by not disclosing the truth or breaching an agreement in a hidden way, which is prohibited according to the Shari’a.
	Khilaba	خلابة	Fraudulent misrepresentation	A form of fraud, either in word or deed by a party to the trading contracts with the intention of inducing the other party into making a contract.
	Khiyar	خيار	Option, choice	The option or power to annul or cancel a contract. The jurists recognise several different types including khiyar al ru`yah (option to cancel upon viewing), khiyar al`ayb (option to cancel if undesirable), khiyar al naqad (option to cancel on non-payment), khiyar al shart (option to rescind sale) and khiyar al majlis (option to cancel in the contractual session).
	Khulta	خلطة	Mixture, commingling	Typically refers to the permissible mixing of different asset classes in a security (e.g. real property, debt, equity) or the capital structure (equity capital and debt) (all of which may not be Islamically acceptable) according to the Shari'a. In investment markets, this is typically applied to either the gross amount of interest bearing debt to market capitalisation of a company or the proportion of sale based recievables to other assets such as ijara in the structuring of sukuk. In both cases, the preferred limit of interest debt or sales recievables is 1/3 or 33%.
	Khayar An Naqd Al Islami	خيار النقد الاسلامي	Islamic currency option	An Islamic finance treasury arrangement to mitigate currency exposure wherein a party purchases a commodity on a murabaha basis payable on deferred terms in its preferred domiciled currency and then sells the same commodity on a murabaha basis to a counterparty, payable in either its preferred domiciled currency or another currency for a stipulated amount (option currency). This replicates the effect of a currency option and is acceptable since it is allowed in Islamic law to require payment in an alternative currency if this is pre-agreed at the inception of the murabaha contract and the amount receivable in the alternative currency is exactly stipulated.
L	Phonetic Spelling	Arabic	English	Definition
	Luqta	لقطة	Missing property	An item misplaced by its owner that someone else finds. The topic raises questions regarding the responsibilities of the person who finds the lost property. Should they leave it where they found it? Should they take possession of it in order to safeguard it until the owner returns? Should they take possession of it and do what they want with it?
M	Phonetic Spelling	Arabic	English	Definition
	Madd	مدَ	Measure	A dry measure equal to 1/4 'sa that was in use in Madina during the time of the Prophet Muhammad (pbuh) and continued to be part of the classical Islamic measurement system.
	Madhhab	مذهب	School of classical Islamic jurisprudence	A fiqh school or orientation characterised by differences in the methods by which certain source-texts are understood and therefore result in differences in the Shari’a rulings that are deduced from them. There are four well-known madhahib among Sunni Muslims whose names are associated with the classical jurists who founded them: Hanafi, Maliki, Shafi`i and Hanbali.
	Mahr	مهر	Bridal gift	An obligatory gift of money given by a groom to a bride that is one of the integral components of a valid marriage agreement.
	Makhatir Tuhaddid An Nidham Al Mali Aw As Souq	مخاطر تهدد النظام المالي أو السوق	Systemic risk	The risk of collapse of an entire financial system or entire market.
	Makruh	مكروه	Detested/ Reprehensible	Said of an action that one is rewarded for avoiding, but not punished for committing. Among the terms used by jurists (fuqaha') to classify actions with regard to their desirability.
	Mal Mutaqawam	مال متقوم	Goods with commercial value	Goods or assets the use of which is lawful under Islamic law, or wealth that has a commercial value. Legal tenders or rights to property that carry monetary value are also included in mal mutaqawam. Certain items may have commercial value, but are considered non-valuable for muslims, such as wine and pork products.
	Malik (Imam)	الامام مالك	Malik bin Anas	Pre-eminent jurist (faqih) of the late second/eighth century after whom the Maliki madhhab is named.
	Mandub	مندوب	Recommended	Recommended or virtuous actions, fulfillment of which is rewarded in Islamic law, but may be neglected without punishment.
	Manfaa	منفعة	Usufruct	The yield that a usable property produces. The term is often used by the fuqaha' to describe the usufruct associated with a given property, especially in leasing transactions. Ijara is defined as a sale of a manfa'a. In an automobile lease, for example, the term manfa`a might be used to describe the benefit that the lessee derives from the use of the car for the duration of the lease (as opposed to the actual ownership of the vehicle).
	Maqasid Al Sharia	مقاصد الشريعة	The higher purposes of the Shari’a	The term maqasid al shari`ah refers to a juristic-philosophical concept developed by the later generations of the classical fuqaha', who attempted to formulate the goals and purposes of the Shari’a in a comprehensive manner to aid in the process of investigating new cases and organising previous existing rulings. The Shari’a is built upon three important objectives: purification of the soul, upholding justice and protection of the interests of all sides.
	Maslaha Ammah	مصلحة عامة	Public good or benefit	Consideration utilised for deriving Islamic juristic rules (fiqh).
	Masuliyat	مسؤوليات	Responsibilities	The obligation of an entity arising from past transactions or events, the settlement of which may result in the transfer or use of assets, services or other yielding of economic benefits in the future.
	Masraf	مصرف	Bank	An intermediary that performs a variety of financial services.
	Maysar	ميسر	Gambling	To risk (wager) money or something of material value (stake) on an event with an uncertain outcome (chance) with the primary intent of winning additional money and/or material goods.
	Milkiya	مال/ ملكية	Property	Wealth, money, property; any valuable thing that can be possessed.
	Milkiyat Al Khadamat	ملكية الخدمات	Service right	The right to a service that may be securitised through a pre-sale with sukuk holders benefiting from periodic distribution of underlying payments or service delivery.
	Miskin	مسكين	A destitute person	A recipient of zakat, generally understood to be poorer than a faqir in that the miskin possesses nothing.
	Mithaq	ميثاق	Covenant	Refers to an earnest and firm determination on the part of the concerned parties to fulfil contractual obligations; stronger than an ordinary contract.
	Al Mithlu Bil Mithl	المثل بالمثل	Like for like	Like for like (in exchange transactions). Read in context of Islamic rule prohibiting usury in trade (riba al fadl) – similar commodities are to be traded at equal amounts/volume/units of measure, regardless of specific details (i.e. dates are to be exchanged at equal amounts regardless of market preference). See ‘riba al fadl’.
	Mithli	مثلي	Fungible goods	Goods of the sort that one unit of the good is substantially equivalent to another unit of the same good of the same quality at the same time and place. Antonym: qimy.
	Mizan Al Muaamalat Al Jariya	ميزان المعاملات التجارية	Current account	The sum of the balance of trade (exports minus imports of goods and services), net factor income (such as interest and dividends) and net transfer payments (such as foreign aid).
	Al Motawasset Al Hissabi Li Sear Faedat Al Ard Wa Altalab Fima Bein Al Bunuk	المتوسط الحسابي لسعر فائدة العرض والطلب فيما بين البنوك	Swap rate	A fixed rate that makes the market value of a given swap zero at initiation.
	Muaddal Aldayn Ila Ras Al Mal	معدل الدين إلى رأس المال	D/E ratio	A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets.
	Bay Al Muajjal	بيع المؤجل	Deferred payment sale	A sale in which payment is delayed and delivery of the contracted goods is immediate. This financing technique has been adopted by Islamic banks and combined with the murabaha contract to form murabaha muajjal. This contract allows the seller to earn a profit margin on his purchase price and allows the buyer to pay the price of the commodity at a future date in a lump sum or in instalments. The seller has to expressly mention the cost of the commodity and the margin of profit is mutually agreed. The price fixed for the commodity in such a transaction can be the same as the spot price or higher or lower than the spot price.
	Al Bay Al Muallaq	البيع المعلق	Suspended sale	A sale transaction, the effectiveness of which is related to a future condition or action.
	Muamala Muharrama	معاملة محرمة	Unlawful transaction	Term used to describe a party whenever it transacts (e.g. sells, rents, etc.) with someone else's property without the permission of the Shari’a (e.g. wakalah). Such is the case when a party does not own the property and is not the wakil (authorised representative) or wali (guardian) of the true owner.
	Muamalat	معاملات	Transactions	Economic or business transactions.
	Muashshir Murajjah Bi Al Qima As Suqiya Li Al As-Hum	مؤشر مرجح بالقيمة السوقية للأسهم	Cap-weighted index	An index whose components are weighted according to the total market value of their outstanding shares.
	Mubaa	المباع	Subject of sale	The item or commodity that is traded in a transaction.
	Mubah	مباح	Permissible	Lawful; an object that is lawful for use and trade.
	Mudaraba	مضاربة	Investment management partnership	A form of partnership where one party provides the funds while the other provides expertise and management. Any profits accrued are shared between the two parties on a pre-agreed basis, while loss is borne by the provider(s) of the capital.
	Mudarib	مضارب	Investment manager	Entrepreneur-manager in a mudharaba contract.
	Mudarib Al Yawm Al Wahid	مضارب اليوم الواحد	Day traders	Day trading refers to the practice of buying and selling financial instruments within the same trading day such that all positions are usually closed before the market closes for the trading day.
	Mufawada	مفاوضة	Equal partnership	Lit. negotiation. An unrestricted, unlimited and proportionately equal partnership, where the partners are adults, equal in their capital contribution, their ability to undertake responsibility and their share of profits and losses. Each partner has full authority to act on behalf of the others who are jointly and severally responsible for the liabilities of their partnership business, provided that such liabilities have been incurred in the ordinary course of business. Thus each partner can act as an agent (wakil) for the partnership business and stand as surety or guarantor (kafil) for the other partners.
	Mufti	مفتى	Islamic jurisconsult	A highly qualified Islamic legal scholar who issues fatawa (informed legal pronouncements), usually in response to questions posed to him.
	Mugharasa	مغارسة	Agricultural contract	A type of agricultural contract similar to muzara`ah in which a landowner and a worker agree that, in return for the worker's planting and tending of fruit- bearing trees on the landowner's field, the landowner will assign to him a share of the orchard's harvest. Two valid forms of this type of contract exist. In the first, the landowner supplies the necessary materials and bears related expenses while the worker tends the trees for a fixed period. After the expiration of this period, the worker receives a fixed wage or a fixed portion of the orchard. In the second form, which more closely resembles muzara`a, the worker supplies the materials, bears related expenses and receives a share of the harvest.
	Mujtahid	مجتهد	Muslim jurist	A highly qualified expert in fiqh who engages in independent legal reasoning (ijtihad).
	Mukhabara	مخابرة	Sharecropping	Mukhabara is a term used by some of the classical fuqaha' as a synonym for muzara`a and by others to mean an arrangement between a landowner and a worker. Mukharaba is similar to muzara`a except that in mukhabara, supplies are provided by the worker while in muzara`a they are provided by the landowner.
	Mukhassassat Ihtiyatiya	مخصصات احتياطية	Prudential provision	An amount of expense charged against a bank's income/capital, set aside in anticipation that a proportion of the bank's financing/loan portfolio may be ultimately uncollectible.
	Mukhassassat Inkhifad Al Qima	مخصص انخفاض القيمة	Impairment provisions	An amount of expense charged against a bank's income/capital, set aside in anticipation that the value of a bank's financing/loan portfolio may be ultimately reduced due to being uncollectible.
	Milkiyat Mushtaraka	ملكيات مشتركة	Cross-holdings	When listed corporations own securities issued by other listed corporations.
	Muqasa	مقاصة	Netting	Setting off matching debts. An agreement between two parties, each of which is indebted to the other, to mutually cancel their debts. If the amount of one debt is greater than the other, the remainder will continue to be the obligation of the debtor unless otherwise agreed. Netting is an acceptable transaction if the two debts are Shari’a-compliant, and regardless of the nature of the debts, i.e., they can be in different currencies, or one can be a commodity while the offsetting debt can be from another class of assets, etc.
	Murabaha	مرابحة	Full disclosure trust sale; also, Mark-up/Cost plus sale	Originally a term describing a sale in which the seller sells his merchandise for more than the price at which he acquired it. The term is used in contemporary Islamic finance to describe a financing scheme in which a financial institution, usually a bank, agrees to purchase merchandise for a client provided that the client promises to purchase it from the financial institution at an agreed mark-up.
	Murabaha Aksiya	مرابحة عكسية	Reverse murabaha	A method used for monetisation. Islamic cash financing mechanism where one party purchases an asset on credit from a second party on deferred payment basis to sell it consecutively for cash to a third party, thereby receiving instant cash. Used by some Islamic banks to provide cash financing to customers.
	Musaqa	مساقاة	Partnership in output	A type of partnership in which a worker receives a share of the produce of an orchard or garden in exchange for labour.
	Musawama	مساومة	Negotiated sale	A simple sale in which the price of the commodity is negotiated by the seller and the buyer without overt reference to the price paid or cost incurred by the former.
	Musharaka	مشاركة	Investment partnership	A standard Islamic transaction in which two or more parties enter into any one of several related types of partnerships (see mudaraba, musaqa, muzara`a). In a typical musharaka agreement, two or more parties agree to provide capital (ra's mal) towards the financing of a commercial venture, share profits according to a stipulated ratio and share losses on the basis of equity participation.
	Musharak Fi Ar Ribh Wa Al Khasara	مشاركة في الربح والخسارة	Profit and loss sharing	The term is used to describe any one of several financial schemes based on the principle of interest-free lending and featuring the use of mudaraba and musharaka as financing instruments.
	Muslim	مسلم	Muslim	A Muslim is a person whose religion (deen) is Islam (willing submission to Allah, Lord of the Universe). One who formally announces his Islam by testifying to the fact that there is none deserving of worship except Allah and that the Prophet Muhammad (pbuh) is the Messenger of Allah.
	Mustahabb	مستحب	Meritorious	Recommended or virtuous actions, fulfillment of which is rewarded in Islamic law, but may be neglected without punishment. Falls between the classifications of permissible (mubah) and obligatory (wajib) actions in Islamic law.
	Mustahaqqat Ash Sharika Lada Al Ghayr	مستحقات الشركة لدى الغير	Receivables	Amounts owed to a business or corporation.
	Mustathmer	مستثمر	Investor	An investor in the context of any of the contracts, like mudaraba, used for investment products.
	Muwaada	مواعدة	Mutual/bilateral promise/ undertaking	A mutual promise.
	Muwadhaa	مواضعة	Discount sale	Any sale in which the seller sells his merchandise for less than the price at which he acquired it. The purchaser is informed about the discount and the original acquisition cost (one type of trust sale/bay al amanah).
	Muzabana	مزابنة	Bartering fresh fruit for dry	A transaction in which the owner of fruit trees agrees to sell his fruit for an estimated equivalent amount of the dried fruit. Originally an agricultural practice, it was prohibited by the Prophet Muhammad (pbuh), with the exemption of araya, because of the strong element of gharar. Some fuqaha' use the term to describe any sale in which the weight or volume of the exchange items is unspecified.
	Muzaraa	مزارعة	Share-cropping	An agreement between two parties in which one agrees to allow a portion of his land to be used by the other in return for a part of the produce of the land.
	Muzayada	مزايدة	Auction sale	Bay al muzayadah is a Shari’a principle governing open auctions, with the asset awarded to the highest bidder.
N	Phonetic Spelling	Arabic	English	Definition
	Najash	نجش	Deception	The prohibited practice of deceiving and inciting a potential buyer during the course of pre-sale negotiations either through insincere bidding on the part of a spectator (such as bidding with no intention of buying but merely to have the would-be buyer raise his bid), or false statements on the part of the seller.
	Naqd	نقد	Currency	A term used by the classical fuqaha' to refer to currency or ready money – gold, silver, coins, notes and any other form of ready cash – often contrasted with dayn (debt).
	Naqs Sanawi	نقص سنوي	Annual deficit	The difference between total revenue and total expenditure of a government.
	Nisab	نصاب	Exemption limit	The exemption limit for the payment of zakat. A Muslim who possesses wealth below the nisab is exempted from paying zakat, while a Muslim who possesses wealth at or above this exemption limit is obliged to pay zakat. The nisab differs depending on the type of wealth in question.
	Nisbat Al Arbah Ila Al Makhater	نسبة الأرباح إلى المخاطر	Risk-reward ratio	A comparison of how much risk a trade has to its profit potential.
	Nisbat As Sear Ila Ar Ribh	نسبة السعر إلى الربح	Price-to-earnings ratio	A measure of the price paid for a share relative to the annual net income or profit earned by the firm per share.
Q	Phonetic Spelling	Arabic	English	Definition
	Qabd	قبض	Possession	Taking possession, physically or legally, of a good or a commodity in an exchange transaction. Its taking place immediately is a necessary condition for the validity of currency exchange.
	Qabul	قبول	Acceptance	Acceptance of an offer in a contract. Antonym: ‘ard.
	Qard	قرض	Loan	A transaction in which X lends Y some wealth (e.g. money) to be repaid after the elapsing of a specified amount of time, but which can be called back at any time. Islamic law does not recognise any additional excess in addition to the principal and therefore this transaction is called a good/beneficial loan (see entry: qard hasan). It is, however, legitimate for a borrower to repay more than the amount borrowed as long as it is not stated or agreed at the point of contract.
	Qard Hasan	قرض حسن	Charitable loan	A transaction in which money is lent and paid back without any addition to the principal that is specified in the contract.
	Qard Marhali	قرض مرحلي	Bridge loan	A short-term loan that is used until a person or company secures permanent financing or removes an existing obligation.
	Al Qawaad Al Fiqhiya	القواعد الفقهية	Legal maxims	A compilation of maxims that are summaries of groups of related rules that are foundational for deriving rules from the Shari’a and form the basis of scholars’ opinions (fatawa) on new areas.
	Qimar	قمار	Gambling	A type of prohibited arrangement in which the acquisition of property is contingent upon the occurrence of an uncertain event and where one party necessarily gains at the cost of others. Similar to maysar, which does not necessarily require a loss to one party at the gain of another.
	Qirad	قراض	Investment management partnership	Synonym: mudaraba.
	Qita	قطاع	Sector	One of several subdivisions in an economic system (used for analysis and classification).
	Qimi	قيمي	Non-fungibles	Specifically identified goods or commodities that do not have an exact replacement. Antonym: mithli.
	Qiyas	قياس	Analogy	Derivation of the law on the analogy of an existing law if the basis/rationale ('illah) of the two are the same. One of the tools of ijtihad and sources of Islamic jurisprudence.
	QuRan	قرآن	Qu’ran (literally The Recitation)	The word of Allah, Lord of the Universe, revealed to the last of the Prophets, Muhammad (pbuh), via the Archangel Jibril (Gabriel); the Holy Book of Islam.
	Qurud Mutaathera	قروض متبعثرة	Non-performing loans	Loans that are in default or close to being in default.
	Qurud Ghayr Madmuna Bi Usul	قروض غير مضمونة بأصول	Unsecured loans	Unsecured loans; the lender relies on the lendee’s promise to pay the loan back.
R	Phonetic Spelling	Arabic	English	Definition
	Rabb Al Mal	رب المال	Owner of capital/ Investor	The investor who places his funds with the investment manager (mudarib) in a mudaraba contract. See entry ‘mudaraba’.
	Rahn	رهن	Collateral	A pledge or the transaction that governs such a pledge. The collateral can be utilised to settle the debt when a debtor is in default.
	Ras Al Mal	رأس المال	Capital	i) The money or property that an investor (rabb al mal) invests in a profit- seeking venture, often in a partnership (musharaka) such as a mudaraba or shirkah arrangement. ii) Any form of wealth capable of being employed for the production of more wealth.
	Riba	ربا	Interest	Any increase in a loan or sale transaction that accrues to the lender, seller or buyer, without the provision of an equivalent countervalue to the other party. Riba encompasses various types of illicit gain, of which banking interest is one example.
	Riba Ad Dayn	ربا الدين	Debt interest	Interest earned on lending money to another party.
	Riba Al Fadl	ربا الفضل	Exchange surplus interest	Any commodity-for-commodity exchange transaction (i.e. barter) in which the exchanged commodities are of the same type but of unequal measure or the delivery of one commodity is postponed. This is one form of riba that is forbidden by Islam.
	Riba An Nasia	ربا النسيئة	Delayed interest	The practice of lending money for a specified period of time with the understanding that the borrower returns the amount originally lent together with an increment in consideration of the time that the lender granted for repayment. Riba al nasi`a is one of the two categories into which riba is often divided by the fuqaha', the other being riba al fadl. Riba al nasi'a takes place when two ribawi substances (see al amwal ‘al ribawiyya’) are exchanged, one immediately and the other with a delay.
	Rishwa	رشوة	Bribery	Achieving a goal through conspiracy and payment.
	Rukn	ركن	Pillar	An integral part of an act, such as a transaction, without which the act cannot be performed.
S	Phonetic Spelling	Arabic	English	Definition
	Saa	صاع	Dry measure	A dry measure in use in Madina during the time of the Prophet in which dates, barley and other similar items were weighed.
	Sadaqa	صدقة	Voluntary charity	Giving more to charity than stipulated by zakat.
	Sadd Al Dharaa	سد الذرائع	Prohibiting ostensibly legitimate means to illegitimate ends	An important Islamic maxim utilised by scholars to prohibit transactions on the grounds of blocking the lawful means to an unlawful end/outcome. For instance, selling grapes to a wine maker or selling weapons during civil unrest would be considered prohibited, even though selling grapes or weapons would not be considered prohibited in ordinary circumstances.
	Sear Al Bay Al Rasmi	سعر البيع الرسمي	Official selling price	Agreed price at which an item should be sold.
	Saer Al Suq	سعر السوق	Market price	Market price that has to be paid in case any issue arises in deciding the actual price in any transaction.
	Sear Taswiya	سعر التسوية	Matching rate	Matching rate in qirad/mudaraba, which has to be paid to the mudarib if the mudaraba/muqarada contract becomes voidable.
	Safi Al Arbah Al Aada Ila Al Musahimin	صافي الأرباح العائدة إلى المساهمين	Net income	Net profit attributable to shareholders.
	Safi Aqsat Al Tamin Al Muktataba	صافي أقساط التأمين المكتتبة	Net written premiums	Written premium less deductions for commissions and ceded reinsurance.
	Sahih	صحيح	Sound, healthy, correct	A term used to describe a valid contract. A hadith of the highest level of authentication. Antonym: batil.
	Sahm Al Sila Al Mutadawala	سهم السلع المتداولة	Exchange traded commodity	An investment vehicle that tracks the performance of an underlying commodity index including total return indices based on a single commodity.
	Salah	صلاة	Ritual prayer	The second pillar of Islam after the shahada.
	Sanadat	سندات	Bonds	A debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a specified interest rate.
	Sanduq Mutadawal Fi Al Bursa	صندوق متداول في البورصة	Exchange traded fund	An investment fund traded on a stock exchange.
	Sanduq	صندوق	Fund	A uniquely identifiable sum of money set aside for the purposes of a transaction, a project, a person, a business, an investment or other public or private institutions.
	Sarf	صرف	Currency exchange	The exchange of gold for gold, silver for silver and gold for silver or vice versa. In Islamic law such exchange is to be concluded at par and on the spot.
	Shahada	شهادة	Witness, testimony	Testimony; bearing witness that Allah has the unique right to be worshipped to the exclusion of anything or anyone else and that the Prophet Muhammad (pbuh) is the Messenger of Allah.
	Sharika	شركة	Partnership/Joint ownership	Any contract between two or more persons in which they agree to enter into a joint financial enterprise and divide the profits between them.
	Sharikat Shibih Hukumiya	شركات شبه حكومية	Parastatal	Government-owned corporations, state- owned enterprises, state enterprises and government business enterprises are legal entities created by a government to undertake commercial activities on behalf of the owner government.
	Shirka Mutasawiya	شركة متساوية	Partnership	An unrestricted, unlimited and proportionately equal partnership.
	Shirkat Amal	شركة عمل	Partnership in labour	Juristic definition of a partnership contract based on contribution of labour. Each party provides labour instead of capital. In this case, all wages earned by the partners would be placed into a wage pool, which is then shared amongst all parties. Form of partnership by contract (sharika al ‘aqd) in contrast to partnership by ownership of assets (sharika al milk).
	Sharika Istithmar Mubashir	شركة استثمار مباشرة	Private equity firm	An investment manager that makes investments in the private equity of operating companies through a variety of loosely affiliated investment strategies.
	Shirkat Al Amwal	شركة الأموال	Partnership by capital contribution	Juristic definition of a partnership contract based on contribution of capital such as a joint commercial venture, similar to how shareholders provide capital to a corporation. Form of partnership by contract (sharika al ‘aqd) in contrast to partnership by ownership of assets (sharika al milk).
	Shirkat Al Milk	شركة الملك	Partnership by asset ownership	Partnership established by the right of ownership, where each partner has provided capital in order to purchase a particular asset/property. Contrast to contractual partnership (sharika al ‘aqd).
	Shirkat Al Aqd	شركة عقد	Contractual partnership	Juristic definition of a contract between two or more parties to combine their assets, labour or liabilities for the purpose of making profits. This type of contract is contrasted to a partnership by ownership (sharakat mulk) and includes sub classifications such as unequal partnership (sharakat al inan), partnership by capital contribution (sharakat ul amwal) and partnership by creditworthiness (sharakat ul wujooh).
	Shirkat Al Inan	شركة العنان	Unequal partnership	Juristic definition of a limited partnership with unequal capital contributions. Contract of partnership based on agency in which participation may either be on the basis of wealth or labour or credit- worthiness, and in which equality of contribution or legal capacity is not necessary. Form of partnership by contract (sharakat al aqd) in contrast to partnership by ownership of assets (sharakat mulk).
	Shirkat Al Wujooh	شركة الوجوه	Partnership by creditworthiness	Juristic definition of a partnership where the parties contribute their creditworthiness/reputations to purchase assets on deferred payment in order to sell them on credit and make a profit, which is then shared between the parties. The term wujooh is derived from wajahat or goodwill. Form of partnership by contract (sharakat al aqd) is in contrast to partnership by ownership of assets (sharakat mulk).
	Sharia	شريعة	Islamic law	Islamic law, originating from the Qu’ran, as defined by practices and explanations rendered by the Prophet Muhammad (pbuh) and ijtihad of ‘ulama (personal effort by qualified Shari’a scholars to determine the true ruling of the divine law in a subject matter).
	Shart	شرط	Stipulation, condition	A condition or stipulation in a contract.
	Shart Al Jazaa	شرط الجزاء	Penalty clause	A clause that a purchaser can put into, for example, an istisna' agreement whereby the price of an item being manufactured would decrease in the case of a delay in delivery by the seller/manufacturer whereby the delay benefits the purchaser.
	Sigha	صيغة	Contractual formula	A formal exchange between contractual parties indicating their willingness to enter into a contractual agreement. It is a rukn (integral element) of the Islamic contract and essentially consists of a proposal (ijab) on the part of one contractual party and an acceptance (qabul) on the part of the other, either of which may be verbal, written or even gestural, depending on the circumstances under which the contract is closed.
	Sanduq Istithmar Maftuh	صندوق الاستثمار مفتوح	Open-ended fund	Collective investment scheme that can issue and redeem shares at any time.
	Souq	سوق	market	market/bazaar
	Suftaja	سفتجة	Debt transfer	A debt transfer transaction practised in Islamic societies in which a debtor authorises his agent (wakil), or someone who owes him a debt, to pay a given amount to the person to whom he is indebted. Suftaja is related to and may be considered a special case of the standard Islamic debt transfer transaction known as hawala.
	Sukuk	صكوك	Islamic bond	A term used in contemporary Islamic finance to describe financial certificate equivalents to conventional debt issuances such as bonds. However, unlike debt issuances, sukuk holders are the legal and/or beneficial owners of the underlying assets, and as such, receive the equivalent of a coupon from the performance of the yielding asset.
	Sunna	سنة	The ‘way’ of the Prophet Muhammad (pbuh)	The actions, deeds, endorsements and characteristics of the Prophet Muhammad (pbuh), which inform the life of a Muslim.
T	Phonetic Spelling	Arabic	English	Definition
	Taazur	تأزر	Collaboration, contribution, co- operation	Two or more things functioning together to produce a result.
	Tabadul Muadlat Ar Ribh	تبادل معدلات الربح	Profit rate swap	The combination of either two legs of a murabaha contract or multiple murabaha undertakings to replicate an interest rate swap (see entry: swap/'aqd mubadalat). Practised in Islamic finance as a necessity for risk management/cost reduction purposes.
	Tabadul Wadaa	تبادل ودائع	Exchange of deposits	An Islamic finance treasury arrangement wherein two parties place alternative currency deposits between themselves for a stipulated period for either satisfying liquidity requirements in a particular currency or for placing excess liquidity in a deposit.
	Tabarru	تبرع	Charitable contract	Charity or donation for the pleasure of God.
	Aqd Tabaru	عقد تبرع	Non-commutative contract	A unilateral transfer contract classification in fiqh muamalat, in which one party does not get any return or compensation or consideration as in the case of a gift (hiba), loan (qard) or guarantee (kafala).
	Tabdheer	تبذير	Extravagance	Spending wastefully on items whether or not these are explicitly prohibited by the Shari’a and irrespective of the quantum expenditure. See also israf.
	Tadlis Al Aib	تدليس العيب	Fraudulent omission of defects	Seller intentionally hiding the defects of goods, which is prohibited according to Shari'a principles.
	Taftit Milkiya Al Musahimin	تفتيت ملكية المساهمين	Share dilution	When new shares are issued to fund a takeover deal or raise money, increasing the number of shares and decreasing individual share value.
	Taghtiya Ajila	تغطية أجلة	Forward cover	Contract or option involving sale or purchase of a currency at a fixed price on a fixed future date, arranged or bought as a hedge against adverse exchange rate fluctuations.
	Tahawwut An Naqdi Al Islami	التحوط النقدي الأسلامي	Islamic currency hedge	An Islamic finance treasury arrangement to mitigate currency exposure. For instance, consider party A, which has a liability payable at some date in the future. Party A purchases a commodity on a murabaha basis payable on deferred terms in its preferred domiciled currency and then sells the same commodity on a murabaha basis payable on deferred terms to Party B in the required currency, thereby recieving the currency that it requires in the future and paying its preferred currency.
	Tahwilat Al Mughtaribin	تحويلات المغتربين	Remittances	Transfers of money by foreign workers to their home countries.
	Takaful	تكافل	Islamic insurance	An Islamic alternative to conventional commercial insurance based on the concept of mutual support (ta'awun). It provides mutual protection of assets and property. Takaful is similar to mutual insurance in that members are the insurers as well as the insured.
	Tamweel	تمويل	Financing	The act of providing funds for business activities, making purchases or investing.
	Tamweel Marhali	تمويل مرحلي	Bridge financing	A method of financing used to maintain liquidity while waiting for an anticipated and reasonably expected inflow of cash.
	Tamwil Mutanahi Assighar	التمويل متنامي الصغر	Microfinance	Provision of financial services to low- income clients or solidarity lending groups who traditionally lack access to banking and related services.
	Tanajush	تناجش	Price manipulation	Refers to a conspiracy between a seller and a buyer to artificially inflate the price of goods.
	Tandeed	تنضيض	Profit calculation period	The period in mudaraba when profit can be calculated.
	Taqsim Al Umala Ila Sharaeh Hasb Al Istihlak	تقسيم العملاء على شرائح حسب الاستهلاك	Segmentation	The identification of subsets of buyers within a market who share similar needs and who demonstrate similar buyer behaviour.
	Taqyim Al Waqi Lil Wadhea Al Mali (Lil Sharika) Bina Ala Al Qima As Soukiya	التقيم الواقعي للوضع المالي (للشركة) بناء على القيمة السوقية	Mark-to-market	Accounting for the value of an asset or liability based on the current market price of the asset or liability, or for similar assets and liabilities.
	Tasjeel Al Iradat	تسجيل الإرادات	Revenue recognition	The choice of which transactions a company should consider to be part of its sales.
	Tasnif Al ITimani Li Wadaa Al Umlat Al Ajnabiya Tawilat Al Mada	التصنيف الإتماني لودائع العملات الأجنبية طويلة المدى	Long-term foreign currency deposit rating	Intended to incorporate those aspects of credit risk relevant to the prospective payment performance of the rated bank with respect to its foreign currency deposit obligations, including: intrinsic financial strength, sovereign transfer risk, and both implicit and explicit external support elements.
	Tasnif Al Quwa Al Maliya	تصنيف القوة المالية	Financial strength rating	Evaluation of a company's financial strength by an established ratings agency.
	Taswiyat Al Marakiz	تسوية المراكز	Window dressing	A strategy used by mutual fund and portfolio managers near the end of the year or quarter to improve the appearance of the portfolio/fund performance before presenting it to clients or shareholders.
	Tawarruq/ Tassiyeel	تورق / تسييل	Monetisation	To convert something to cash.
	Tawarruq Muad Musbaqan	تورق معد مسبقاً	Organised tawarruq	Pre- arranged or organised tawarruq. See ‘tawarruq’ and ‘reverse murabaha’.
	TaWid	تعويض	Compensation	A renumeration that has to be given, as per normal market rate, if the underlying contract becomes voidable to facilitate or serve others.
	Tawlia	تولية	Sale of cost	Full disclosure sale where price is set equal to the original price.
	Thaman	ثمن	Price	Monetary amount of what is bought and sold in an exchange.
U	Phonetic Spelling	Arabic	English	Definition
	Ujra	أجرة	Fee, wage	A prescribed financial payment for the utilisation of services or usufruct (manfa’a). The word ijara is derived from this root word. In the contemporary context, this word can be used to describe salaries, wages, allowances and commissions. Contrast with ju’ala which means giving a reward for accomplishment of a defined task. While in ujra, acceptance of an ‘offer’ takes place by a designated person, in ju’ala anyone who hears the offer can undertake the work and become entitled to the reward upon completion of the task described.
	Ulama	علماء	Muslim scholars	Shari’a scholars or jurists. See also faqih, mujtahid.
	Umma	أمة	The Muslim community	The “Community of Believers” or the whole Islamic world.
	Usul Aliya Al Mukhatir	أصول عالية المخاطر	Toxic assets	Financial assets whose value has fallen significantly and for which there is no longer a functioning market.
	Usul Al Fiqh	أصول الفقه	Theoretical jurisprudence	A discipline that studies principles of the derivation of rules of fiqh specially related to the Arabic words/verses in the sources of the Shari’a as well as other matters related to those verses.
	Uqud Al Muhadad Saeruha Bi Idafat Hamesh Ribh Muayan Lil Taklifa	العقود المحدد سعرها بإضافة هامش ربح معين للتكلفة	Cost plus contract	A contract where a contractor is paid for all of its allowed expenses to a set limit plus additional payment to allow for a profit.
W	Phonetic Spelling	Arabic	English	Definition
	Bay Al Wadhia	بيع الوضيعة	Discount sale	Sale with loss – at a price less than cost price. A sale in which the seller sells merchandise for less than the price at which it was acquired, and in which the purchaser is informed about the discount and the original acquisition cost. This is a type of trust sale/bay’ al amana.
	Wadia	وديعة	Safe-keeping deposit	Islamic safe-keeping deposit device in which property is entrusted to another party (often a bank) for safe-keeping. No profit can be sought for this property as the trustee does not have rights of disposal.
	Wadia Yadd Ad Daman	وديعة يد ضمانة	Savings with guarantee	Goods or deposit left with a third party for safe-keeping. Practice employed by Islamic banks to accept current account deposits. The depository becomes the guarantor and therefore guarantees repayment of the whole or part of the deposits outstanding in the account when repayment is due. The depositors are not entitled to any of the profits but the depository may provide returns to the depositors as a token of appreciation.
	Waad	وعد	Unilateral Promise/ Undertaking	A unilateral undertaking or a promise by one party to do or not to do certain actions in the future. The primary difference between a promise and a contract is that the promise is binding only on the maker whereas a contract binds both parties.
	Bay Al Wafa	بيع الوفاء	Redemption sale	A sale in which the seller repurchases (redeems) property by refunding the purchase price or less. According to the majority of classical jurists, and the OIC Fiqh Academy, it is ‘a loan with added benefits’ and thus not permissible.
	Wajib	واجب	Obligatory	Obligatory religious duty similar in nature to fard, but the denial of which does not make a Muslim a non-believer. Other than Hanafi school, all other schools consider wajib and fard to be synonymous.
	Wakala	وكالة	Agency	A standard Islamic practice, often used in financial transactions, wherein one party acts as an agent (wakil) for another party.
	Wakalat Istithmar	وكالة استثمار	Investment agency	Fund management contract in which the investor gets all the profit or loss while the fund manager agrees to receive a pre-agreed service fee or commission that could be a lump sum amount or a certain percentage of the invested capital.
	Wakil	وكيل	Agent	An agent under a wakala arrangement.
	Waqf	وقف	Charitable trust	An endowment or a charitable trust set up for Islamic purposes (usually for education, mosques or for the poor). It involves tying up a property in perpetuity so that it cannot be sold, inherited or donated to anyone.
	Wasiya	وصية	Will, testament, bequest	The statement of a Muslim in which he details the manner in which his wealth will be disposed of after his death.
Y	Phonetic Spelling	Arabic	English	Definition
	Yadan Bi Yad	يداً بيد	Hand to hand	Spot settlement in exchange transactions.
Z	Phonetic Spelling	Arabic	English	Definition
	Zakat	زكاة	Zakah tax	The third pillar of Islam; obligatory alms- giving. Every Muslim, who has wealth above a prescribed amount, is required to give money to the Islamic authority for distribution to the poor and the needy. In the absence of the Islamic authority, well-off Muslims are required to distribute alms among the poor and the needy themselves.