This glossary is not limited to Islamic terms and contains Arabic and English terms that are also referred to in the study of Islamic economics, banking and insurance.
Life in the Hereafter.
Mutual Help, which was an arrangement of mutual help or indemnification customary in some tribes at the time of the Prophet Muhammad (pbuh). This is a foundation doctrine based on which Islamic insurance practices, known as Takaful, have been developed.
A general term which conveys the meaning of justice, equity and fairness.
One. Inherently one (God).
Plural of Hukum.
A payment or compensation such as commission, fees or wages charged for services.
A generous reward.
Al-Ghurm bil Ghunm
The principle that one is entitled to a gain only if one agrees to bear the responsibility for the loss. Earning profit is legitimised only by risk-sharing and engaging in an economic venture. This provides the rationale and the principle of profit-sharing in Shirkah (partnership) arrangements.
Al-kharaj bil daman
Link of exposure to risk, one can claim profit only if one is ready to bear the business risk, if any. The principle in Islamic jurisprudence that entitlement to return or yield ( al-kharaj) is for the one who bears the liability ( daman) for something, say an asset, and one who does not bear the liability has no claim to the yield.
The just price.
Al-Wakala al Mutlaqa
Absolute power of attorney.
One who knows. See Ulama.
The name for God in Islam. It is used by Arabic-speakers of all Abrahamic faiths, including Christians and Jews. The concept of Allah, is the only real supreme being, all-powerful and all knowing Creator, Sustainer, Ordainer, and Judge of the universe. There is no plural, masculine or feminine form of this word in Arabic. This denotes the One True God, the Almighty Creator, Who is neither male nor female . Islam puts a great emphasis on the conceptualisation of God as strictly singular ( tawhid). God is unique (wahid) and inherently one ( ahad), all-merciful and omnipotent. Islam teaches that Allah is the same God worshiped by the members of other Abrahamic religions such as Christianity and Judaism.
Trust. Lit.: reliability, trustworthiness, loyalty, honesty. Technically, an important value of Islamic society in mutual dealings; it also refers to deposits in trust. A person may hold property in trust for another, it entails the absence of any liability for loss, except for breach of duty. By extension, the term can also be used to describe different financial or commercial activities such as deposit taking, custody or goods on consignment. Deposits in current accounts (usually non-interest bearing) with Islamic banks are regarded as Amanah. If the bank obtains authority to use the funds in the current accounts to invest in its business,Amanah transforms into a loan from the depositor to the bank and the bank is liable to repay the full amount in the current account, irrespective of profit or loss made by the bank.
Literally it means worker. One who performs a task, an agent. One who deserves compensation for performing a task, such as the mudarib (manager) in a mudarabah contract or a zakat collector.However, inFiqh it also refers to the working partner inmudarabah contract. Under this contract, one partner provides the capital and the other provides the labour who is called amilor mudarib.
One who holds honestly the trusts of other people; trustworthy.
Plural of Mal which means worldly possessions including both property and money (wealth).
Contract, Agreement, Bond. Synonymous with the word "contract" in modern law.
Aqd Ghair Lazim
A contract in which any one of the parties has a unilateral right to revoke it with the consent of the other(s).
A contract in which none of the parties has a unilateral right to revoke it without the consent of the other(s).
A contract of sale.
A contract of exchange in which compensation is given against the goods or services received.
A loan contract. Also known as Qard.
Kin or persons of relationship who share responsibility.
A non-refundable down payment or deposit paid by a buyer for the right to purchase goods at a certain time and certain price in future; if the right is exercised, it becomes part of the purchase price. If the buyer does not complete the purchase or backs out for any reason, the seller has the option to forfeit the deposit. Also known as Urboun and Bai al-Arbun. Also see Hamish Jiddiyah.
Loan, which means to give any non-fungible commodity to another for use, without taking any return for its use.
Anything of value which may be tangible or intangibe. Any interest in real or personal property which can be appropriated for the payment of debt.
The Financial Accounting Standards Board (FASB) describes an asset as having three essential characteristics: (a) it embodies a probable future benefit that involves a capacity, singly or in combination with other assets, to contribute directly or indirectly to future net cash inflows, (b) a particular entity can obtain the benefit and control others’ access to it, and (c) the transaction or other event giving rise to the entity’s right to or control of the benefit has already occurred. See Fictitious Asset
Plural of Waqf, meaning trust. Also see Waqf
A verse or passage in the Qur'an.
Monetary wealth. A tangible (physical) asset. Also, refers to currency or ready money. Ayn is often contrasted with Dayn.