A Glossary of called Islamic words acclimated in finance.
Posted on February 10, 2012 |
A Glossary of called Islamic words acclimated in finance.
Amanah: Agency trustworthiness, with associated aspects of adherence and honesty. As a axial added meaning, amanah additionally describes a business accord area one affair keeps another’s funds or acreage in trust. This absolutely the best broadly acclimated and accepted appliance of the term, accepting a continued history of use in Islamic bartering law. It can additionally be acclimated to call altered cyberbanking activities such as drop taking, aegis or appurtenances on consignment.
Arbun: Agency a bottomward payment. It’s a non-refundable drop paid to the agent by the applicant aloft accordant a auction adjustment calm with an adventure that the auction adjustment will be completed during a prearranged period.
Gharar: This agency uncertainty. It’s one of three basic prohibitions in Islamic accounts (the others actuality riba and maysir). Gharar is a adult abstraction that encompasses assertive types of ambiguity or accident in a contract. The prohibition on gharar is generally acclimated as the area for criticism of accepted cyberbanking practices such as speculation, derivatives and abbreviate affairs contracts.
Islamic cyberbanking casework / Islamic cyberbanking / Islamic accounts : Agency cyberbanking casework that accommodated the specific requirements of Islamic law or Shariah. Whilst advised to accommodated specific Muslim religious requirements, Islamic cyberbanking is not belted to Muslims. Both the barter and the account providers can be non-Muslim as able-bodied as Muslim.
Ijara: Agency an Islamic leasing agreement. Ijarah permits the cyberbanking academy to acquire a accumulation by charging leasing rentals instead of lending money and earning interest. The ijarah abstraction is continued to appoint and acquirement agreements by Ijarah wa iqtinah.
Maysir: Agency gambling. It’s addition of three axiological prohibitions in Islamic accounts (the added two actuality riba and gharar). The prohibition of maysir is generally acclimated as the base for criticism of accepted cyberbanking practices such as accepted insurance, belief and acquired contracts.
Mudarabah: A Mudarabah is a anatomy of Advance partnership. Here, basic is provided by the broker (the Rab ul Mal) to addition affair (the Mudarib) in adjustment to undertake a business or advance activity. Profits are again aggregate according to pre-arranged accommodation but any accident on the advance is built-in alone by the broker and the mudarib again loses the accepted assets share.
Mudarib: The mudarib is the advance administrator or administrator in a mudarabah (see above). It is this managers albatross to advance the investor’s money in a action or portfolio in barter for a allotment of the profits. A mudarabah is about agnate to a adapted basin of assets captivated in a accepted Discretionary Managed Advance Portfolio.
Murabaha: agency acquirement and resale. As against to lending money, the basic provider purchases the appropriate asset or artefact (for which a accommodation would contrarily accept been taken out) from a third party. The asset is again resold at a college amount to the basic user. By advantageous this college amount by instalments, the basic user finer gets acclaim after advantageous interest. (Also see tawarruq the adverse of murabaha.)
Musharaka: This agency accumulation and accident sharing. It’s a affiliation area the profits are aggregate in pre-arranged accommodation and any losses are aggregate in admeasurement to anniversary partners’ basic or investment. In Musharakah, all the ally to the bartering adventure accord funds and accept the right, but after the obligation, to exercise controlling admiral in that undertaking. It’s a agnate abstraction to a accepted affiliation and the captivation of voting banal in a bound company. Musharakah is admired as the purest anatomy of Islamic financing.
Riba: This agency interest. The acknowledged abstraction extends above interest, but in simple terms, riba covers any acknowledgment of money on money. It does not amount whether the absorption is amphibian or floating, simple or compounded, or what the amount is. Riba is carefully banned beneath Islamic law..
Shariah: This is the Islamic law as appear in the Quran and through the archetype of Prophet Muhammad (PBUH). A Shariah artefact charge accommodated all the requirements of Islamic law. To facilitate this, a Shariah lath is usually appointed. This lath or lath is usually comprised of Islamic admiral accessible to the organisation for advice and administration for the development of Shariah adjustable products.
Shariah adviser: Agency an absolute professional, usually a classically accomplished Islamic acknowledged scholar, appointed to admonish an Islamic cyberbanking organisation on the acquiescence of its articles and casework with Islamic law, the Shariah. While some organisations argue alone Shariah advisers, best authorize a lath of Shariah admiral (often accepted as a Shariah lath or Shariah board).
Shariah compliant: Agency the action that ensures that the requirements of the Shariah, or Islamic law are observed. The appellation is generally acclimated in the Islamic cyberbanking industry as a analogue for “Islamic”- for example, Shariah adjustable costs or Shariah adjustable investment.
Sukuk: This has agnate characteristics to a accepted bond. The aberration is that that they are asset backed and a sukuk represents the commensurable benign buying in the basal asset. The asset is again busy to the applicant to crop the accumulation on the sukuk.
Takaful: This is Islamic insurance. Takaful affairs are advised to abstain the characteristics of accepted allowance (i.e. absorption and gambling) that are so capricious for Muslims. They anatomy the adjustment as a accommodating aggregate basin of funds based on the comcept of alternate assistance.
Tawarruq: When acclimated in claimed finance, a chump with a banknote claim buys article on acclaim on a deferred acquittal basis. That chump again anon resells the account for banknote to a third party. The chump thereby obtains banknote after demography an interest-based loan. Tawarruq is the adverse to murabahah.
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