Glossary

Interest, prohibited in Islam. Any form of income earned without effort or risk, solely from lending, is considered unfair and haram.

A group of Islamic scholars who review and certify that products and services comply with Shariah principles. Without their approval, a product cannot be considered halal.

A markup sale. The bank purchases an asset and resells it to the client with an agreed markup. Used as a Shariah-compliant alternative to consumer credit.

A leasing contract. The bank remains the owner of the asset while the client makes rental payments and may have the option to purchase the asset at the end of the term. Everything that is prohibited in Islam: alcohol, gambling, pork, pornography, etc. Investments or income related to haram activities are considered unacceptable.

Anything permitted under Shariah. In Islamic finance, it refers to fair, transparent transactions with no interest, no speculation, and support for the real economy.

Uncertainty, ambiguity, or excessive risk in transactions. Deals with unclear terms, outcomes, or speculative nature (e.g., gambling, “blind” trading) are prohibited.

Any form of gambling or speculation where profit is based on chance rather than real economic activity.

A partnership where one party provides capital and the other provides management and effort. Profits are shared as agreed, while financial losses are borne by the investor.

Two consecutive sale transactions between the same parties, often involving deferred payment. Permitted in some jurisdictions.

A forward contract where payment is made upfront and the goods are delivered at a future date. Common in trade and agriculture.

A construction or manufacturing contract. The bank commissions an asset or project at a predetermined cost and delivery date.

Islamic investment certificates representing ownership in a real asset, project, or investment—rather than debt obligations.

Mandatory annual charitable donation in the amount calculated as a set proportion of a Muslim’s wealth.

Voluntary charitable giving for the benefit of society or those in need.

Anything prohibited in Islam, including activities that violate Shariah (e.g., alcohol, gambling, usury).

An Islamic insurance model based on mutual assistance and shared risk among participants.

A Shariah-permissible fee for services rendered or work performed.

A voluntary gift of money or property free of charge, out of goodwill.

A safekeeping contract where the bank holds money or valuables with an obligation to return them upon request.

An interest-free loan for a charitable purpose, which is repaid without any additional fees.

A unanimous decision by Islamic scholars on a specific issue.

The process of deriving new rulings for matters not explicitly addressed in the Quran or Sunnah, based on Shariah analysis.

An official written opinion by qualified Islamic scholars stating whether a product, transaction, or practice is permissible under Shariah.

Systematic Shariah supervision of a company’s activities to ensure its compliance with Shariah.

A structured transaction that allows obtaining liquidity through the purchase and sale of goods, while adhering to Shariah norms.

A sale with deferred payment at an agreed price.

A pledge or collateral provided as security for financial obligations.

A donation of property for permanent use for charitable purposes.

A principle of decision-making in the interest of the public good.

A branch of Islamic law regulating commercial and financial relations.

The transfer of ownership rights from one party to another.

A voluntary contribution made for the benefit of a common fund or charitable purpose.

Principle of combating economic injustice and unacceptable practices.

Duty of faithfully guarding and using entrusted property.

A deferred payment or a postponed execution date of an obligation.

A traditional mechanism for transferring funds without physically moving the money.

A general term for contracts and agreements in Islamic law.

Consultation and mutual decision-making between parties involved in a matter or transaction.

Permissible fines or penalties under Shariah (excluding any form of riba).