Shari'ah Frameworks & Principles

The Shari’ah framework includes governance structures, processes and arrangements to ensure that all Islamic financial institutions’ operations and business activities are in accordance with the Shari’ah. Shari’ah principles are the foundation of the practice of Islamic finance through the observance of the tenets, conditions and principles espoused by the Shari’ah. For further details see: ISRA, Islamic Financial System; Principles and Operations.

Shari'ah Principles

Shari'ah: The corpus of Islamic law based on the Qur’an and the Sunnah. Literally, it means a way or a path. Fiqh: is derived from the root word faqaha which literally means comprehension or true understanding, Technically: majority of Islamic authorities, however, define it in terms of its four basic sources and it can, therefore, be defined as follows: “Fiqh, or the science of Islamic law, is the knowledge of one’s rights and obligations derived from the Qur’an or Sunnah of the Prophet (p.b.u.h.), or the consensus of opinions among the learned (ijma’), or analogical reasoning (qiyas).” Usul al-Fiqh: Usul al-Fiqh or the principles of Islamic law, it explains the indications and methods by which the rules of fiqh are deduced from their sources. For further details see: ISRA, Islamic Financial System; Principles and Operations

RESOLUTION No. 68/6/7: INTERNATIONAL RIGHTS IN ISLAM
RESOLUTION No. 70/1/8: EXEMPTION: ITS APPLICABILITY AND ITS RULES
قرار رقم: 202 (8/21) بشأن الحوار بين أتباع المذاهب الإسلامية

The scholars have classified the sources of Islamic law into various categories. One of these classifications is based on the origin of the sources. This classification views Qur’an and Sunnah as the primary sources while other sources based on reasoning are called secondary sources. The Qur’an and Sunnah are considered as the sources that originate from the text of revelation which is called textual sources or al-nass. Other sources based on the power of reasoning are called non-textual sources or al-ra’y. For further details see: ISRA, Islamic Financial System; Principles and Operations.

العائد على ودائع الاستثمار
The Issue Of The Original Ruling Of Contracts And The Permissibility Of Using Terms That Are Not Mentioned In The Sources Of Islamic Law
Riba Al-Fadl: Gold For Gold

Maqasid al-Shariah as defined by Ibn 'Ashur means "the deeper meanings and inner aspects of wisdom (hikam) considered by the Lawgiver in all or most of the areas and circumstances of legislation". He also explained the importance of the knowledge of maqasid al-shari'ah for mujtahids not only in understanding and interpreting the texts of Shari'ah, but also to find soultions to the new problems facing Muslims and about which those texts are silent. Thus, maqasid al-shariah provides a guide and framework for the process of ijtihad to solve issues conforming to human interests while complying with the will of the Lawgiver.

Resolution No. 179 (19/5): Tawarruq: its meaning and types [Organised Tawarruq Impermissible in 2009]
Deposit Insurance Scheme
Resolution No. 67: Purchasing aviation fuel and selling it to Company S
قرار رقم 167 (5/18) بشأن المقاصد الشرعية ودورها في استنباط الأحكام
تمويل قاعات الحفلات والتسلية والإنترنت
تأمين البنك على أمواله وممتلكاته الخاصة
Resolution 149 (7/16): Concerning Health Insurance
Resolution No. 141 (7/15): The Issue Of Masalihu al-mursalah And Its Contemporary Applications
Resolution No. 181 (19/7): Regarding endowing shares, sukuk, material rights and benefits

Islamic Legal Maxims (Qawaid): Legal maxims are general rules which apply to all related particulars. They are a group of questions of jurisprudence under certain general rules, each one of which embraces a large number of questions. Mustafa Al-Zarqa, one of the most prominent contemporary scholars, defined legal maxims as the general fiqh principles which are presented in a simple format consisting of the general rules of Shari'ah in a particular field related to it.

Ijtihad & Fatwa: Ijtihad literally means expending of maximum effort in the performance of an act. Technically, it is an effort made by the mujtahid in seeking knowledge of the legal rules of Shari'ah through interpretation. Fatwa is the embodiment of religious decrees, edicts, opinions or judgement based on scholarly discussions derived from religious sources.

* البيع بالتقسيط
** الاستحواذ على مبلغ العربون في حال النكول عن اتمام العقد
The Islamic Development Bank inquiry regarding financing long-term infrastructure projects
Can the Bank Impose Restrictions on Withdrawals from a Current Account?
Discount For Early Payment
A Stipulation That Doesn’t Impede the Legal Implication of the Deal
RESOLUTION No. 104 (7/11): WAYS OF MAKING USE OF NAZILAHS (FATWAS)
RESOLUTION No. 68/6/7: INTERNATIONAL RIGHTS IN ISLAM
Can a Bank Seek Damages from a Purchase Orderer Who Breaks His Promise to Buy?
RESOLUTION No. 70/1/8: EXEMPTION: ITS APPLICABILITY AND ITS RULES
قرار رقم 177 (3/19) بشأن دور الرقابة الشرعية في ضبط أعمال البنوك الإسلامية أهميتها ، شروطها ، طريقة عملها
قرار رقم 153 (2/17) بشأن الإفتاء: شروطه وآدابه
بيع البنك عملة أجنبية لجهة ما بسعر يحدد مسبقًا
الاستثمار في أسهم الشركات التي لا تهدف إلى التعامل بالربا
القروض المتبادلة
Resolution No. 1 (1/2): Concerning the Zakah of Debts
The Issue Of The Original Ruling Of Contracts And The Permissibility Of Using Terms That Are Not Mentioned In The Sources Of Islamic Law
Resolution No. 181 (19/7): Regarding endowing shares, sukuk, material rights and benefits
Can a Company Partner Be an Employee of the Same Company?

Prohibitions in Islamic Finance

Riba (Interest): Literally: riba: addition, growth, elevation. Allah, the Exalted, said: "You see the earth barren and lifeless, but when We pour down rain upon it, it is stirred [to life], it swells, and it puts forth every kind of beautiful growth in pairs" Surah alHajj (22):5. Anyone who transacts in usury (interest) is known as a murabi (usurer). Technically: any excess compensation without any corresponding counter-value recognized by the Shari'ah. Hanafis: "stipulated excess without a counter-value in a sale". Shafi'is: "an agreement for a specific recompense whose equivalence to the counter-value is unknown according to the standards of the Shari'ah at the time of the transaction, or with a delay in the exchange of either or both counter-values." Some jurists use the term riba for any prohibited sale or any illicit wealth, no matter how it was earned. Riba is divided into riba of debts and riba of sales.

A Promise of Parallel Purchase and Sale of Gold
An Islamic Bank Has Multiple Accounts in Different Currencies with a Foreign Bank, Some Overdrawn and Some with Positive Balance
Can an Islamic Bank Ask a Client to Provide a Conventional Bank as a Guarantor?
Issuing Kafalah In Relation To Conventional Banks
Issuing LGs For Soft Loans
LGs From Conventional Banks for Project Finance
Should an Islamic Bank Offer a Guarantee for a Contractor Doing a Job for a Riba Bank?
The Islamic Development Bank inquiry regarding financing long-term infrastructure projects
Can a Conventional Bank Deposit be Used as Pawn for the Benefit of Islamic Banks
Entering Into A Construction Contract With A Conventional Bank
Resolution No: 13 (1/3)[1]: Concerning The Islamic Development Bank’s inquiries
Syndicated Financing Between Islamic And Conventional Institutions
A Call Option on a Commodity
Can a Creditor Make His Loan Conditional on the Borrower Buying from or Selling to the Creditor?
Can a Customer Islamically Transfer a Traveler’s Check to Another Person in the Same Currency?
Can a Financial Penalty Be Levied on Late Payment of a Loan?
Can a Lender Stipulate a Reciprocal Loan as a Condition for Lending?
Can a Holding Company Sell a Good to a Partially-Owned Subsidiary if It Owns Less Than 50% of the Subsidiary?
Can a Muslim Contractor Build a Building for a Conventional Bank?
Can an Islamic Bank Buy a Company That Runs on Riba in Order to Change It?
Can an Islamic Bank Receive Interest from the Central Bank?
Can Interest Be Used to Pay Taxes?
Is It Permissible for KFH to Sell Goods on the Basis of Murabahah to a Company That Will Resell the Goods on Installments and Will Stipulate an Interest Payment in Case of Delay?
Is It Permissible for the Buyer in Salam Contract to Sell the Goods Purchased to a Third Party Who Will Take His Place in the Contract?
What Would the Transactions of Global Stock Market Be Called?
Is It Allowed to Buy Cars from an Agent on the Condition That the Agent Will Extend a Guarantee to Buyers for Possible Defects and Be Financially Responsible for the Buyers?
RESOLUTION No. 102 (5/11): CURRENCY TRADING
RESOLUTION No. 101 (4/11): DEBT SALE AND LOAN DEBENTURES AND THEIR ISLAMIC SUBSTITUTES IN PUBLIC AND PRIVATE SECTORS
Conducting a Transaction on Behalf of another Person without Their Knowledge (1)
Deferred Sales of Shares in a Company Whose Cash Assets Exceed Its Tangible Assets
Is an Exchange of Deposits a Type of Loan with an Added Benefit?
Is an Islamic Bank Responsible for the Source of the Funds by Which the Debt Owed to It Is Repaid?
RESOLUTION No. 77/8/8: PARTICIPATION IN THE SHARES OF RIBA, (INTERESTS)-BASED JOINT-STOCK COMPANIES
RESOLUTION No. 66/4/7: BAY'AL-WAFA (DEBT GUARANTEE SALE)
Resolution No. 106: an overdraft agreement
Resolution No. 110: Selling foreign currencies to clients for less than the market price in order to encourage them to deal with the Corporation
Resolution No. 124: The impermissibility of paying the interest amounts accumulated from correspondent bank accounts to beneficiaries other than the poor and Islamic charities
Resolution No. 150: Paying or receiving interest from correspondent banks
Resolution No. 151: the Corporation appointing the purchaser as an agent to determine and receive what he will eventually buy
Selling Construction Materials by Murabahah
Selling Construction Materials by Murabahah
Structuring a Construction Contract as Murabahah with a Mark-up Charged on Payment for Labor
الجوائز النقدية أوالعينية
الضريبة المترتبة على الشركات التي يؤسسها المصرف الإسلامي الأردني خارج الأردن
رهن محل تجاري للبنك وتمكينه من الانتفاع بنصف مردود المحل المرهون
إيداع المسلم أمواله في البنوك التي تتعامل بالفائدة
الفوائد المصرفية التي يضطر البنك لإيداعها في المصارف الربوية
الصرف من صندوق الإيرادات قيد التصفية (تسبيقات مالية) على موظفي البنك
الصرف من صندوق الإيرادات قيد التصفية على مستخدمي البنك
الصرف من صندوق الإيرادات قيد التصفية على موظفي البنك
اقتناء أضحية العيد من صندوق الإيرادات قيد التصفية
استعمال الفوائد المحصّلة من بنم الجزائر في تسديد حصة بنك البركة الجزائري في شركة ضمان الودائع
إنفاق حصيلة الإيرادات الناتجة من الفوائد المحرمة وغرامات المدينين المعسرين المماطلين
فرض غرامة تأخير على العميل الذي لا يفي بالتزاماته
دفع الأرباح المستحقة للودائع بالعملات الصعبة
أرباح الودائع بالعملة الصعبة
قيام البنك بإيداع وديعة لدى أحد البنوك الذي يبيعه أجنبية بسعر شراء البنك المركزي
شراء البنك أذونات خزانة بناء على طلب البنك المركزي
الاستثمار في أسهم الشركات التي لا تهدف إلى التعامل بالربا
وضع مبلغ معين من المال تحت تصرف العميل مقابل حصول البنك على نسبة من الإيرادات أو صافي الأرباح
القروض المتبادلة
تحويل عملية مرابحة فاسدة إلى قرض حسن
توزيع جوائز للحسابات الجارية والادخارية
Deferred Installment Sale: Issue Of Selling Assets That Is Not In One’s Possession And Compensation For Refusal To Buy The Subject Matter
Delayed Payments In A Murabahah Contract
Resolution No. 50 (2/6): Rulings on Installment Sales
What Is to Be Done if the Supplier Is Unable to Deliver Some of the Sold Goods?
Circulation of Shares
Trading In The Shares Of Shari’ah-Compliant Companies That Are Involved In Riba-Based Transactions With Conventional Banks
Is it Lawful to Financially Penalize a Rich Debtor Who Delays Payment?
Bonds, Interest Deposits And Unlawful Properties
Taking the Place of the Owner in a Forced Sale
Selling to Someone Who Will Resell Using Interest-Based Contracts
Selling to Someone Who Will Resell by Charging Interest
Riba Al-Fadl: Gold For Gold
Stipulating that Customers not Deal with Competitors
Can an Islamic Bank Take for Security Stocks Issued to a Conventional Bank as Security for an Interest-Based Loan?
Can an Islamic Bank Allow a Shareholder to Mortgage Its Shares as Security for an Interest-Best Loan?
May an Islamic Bank Deposit Money with a Foreign Bank and Give the Interest in Charity?
What is the Riba That the Qur’an Forbids?
What is the Ruling on Selling Cars to a Usurious Institution?

The Arabic word means harm as opposed to what is beneficial and it means to harm someone. Technically it is the same sense. One maxim says harm should be removed. For further details see ISRA Compendium.

Who Is Liable for Damages to Rental Property?
Can a Contractor Be Fined for a Delay in Completing a Job if No Damage Results from the Delay?
Claiming Legal Expenses From The Customers
Would KFH Be Held Responsible in Case the Shipping Company Acknowledged That the Goods Were Sound But Then Failed to Make the Delivery?
Is It Permissible to Stipulate a Penalty in a Sale Contract?
Buying A Portion Of A Land Through Murabahah
The Purchase Undertaker Does Not Want the Intermediate Seller to Incur Added Expenses for Insurance against Certain Risks (2)
The Purchase Undertaker Requests the Intermediate Seller to Pass on Insurance Compensation for Damaged Goods
غرامة التأخير والمماطلة في السداد
تأمين البنك على أمواله وممتلكاته الخاصة
مدى جواز تسجيل المبالغ الزائدة عن أصل الدين ضمن أرباح البنك
Delayed Payments In A Murabahah Contract
Various Issues
If the Value of Insured Property Fluctuates, What Should the Insured Value Be?
Insurance against Investment Risks
Insurance against Vandalism
Insuring Cars and Other Items
Insuring Cash at Bank Branch Offices
Insuring Valued Possessions against Fire, Theft, Etc.
Is Comprehensive Auto Insurance Allowed?
Marine Insurance for 110% of the Goods’ Value, Taking into Account Shipping Expenses among Other Factors
The Permissible Limits of Insurance Compensation
Transporting Goods with a Guarantee against Loss
Various Types of Banking Insurance
What Compensation Amount Should Be Obtained When Insuring Furniture against Fire?
A Penalty Clause for Late Payment
Can a Penalty Clause for Late Payment Be Added to an Islamic Banking Contract?
What Can an Islamic Bank Do if a Debtor Who Can Afford to Pay Delays Payment?
What is the Rule When an Unrestricted Investment Deposit Holder Wants to Withdraw His Deposit before the End of the Deposit Period?

Islamic Law of Contract

Exchange contracts include simple spot sales (bayʿ), sales creating debt like bayʿ mu’ajjal, salam, istisnaʿ, ijaarah, and work done for a reward (juʿaalah). See ISRA research paper; Maqasid al-Shari'ah in Islamic Financial Activities: Instituting The Means (Wasaa'il)(IRP 32).

RESOLUTION No. 73/4/8: AUCTION CONTRACTS

Partnership contracts refer to contracts which are entered into for the purpose of having a partnership in work and profit. It is founded upon the spirit of cooperation and partnership in the sense that profits are shared together by the partners and losses are borne by both of them. For further details see: ISRA, Islamic Financial System; Principles and Operations.

Charity-based contracts are the contracts effected by someone on the basis of benevolence (ihsan) and cooperation (ta’awun), which does not require the exchange of something for another thing. Therefore, an asset ownership in this regard is acquired without any counter-value. For further details see: ISRA, Islamic Financial System; Principles and Operations.

Resolution No. 179 (19/5): Tawarruq: its meaning and types [Organised Tawarruq Impermissible in 2009]
Rules Of Tawarruq
Can the Bank Impose Charges on Withdrawals from a Current Account?
Can the Bank Impose Restrictions on Withdrawals from a Current Account?
Use of Qardh Hasan in Financing

A hybrid contract mixes the elements of a few contracts or various instruments to design a specific Shari'ah-compliant structure to serve a specific purpose in the Islamic Capital Markets (ICM). For further details see: ISLAMIC CAPITAL MARKETS: Principles & Practices.


Should an Islamic Bank Refuse to Open a Letter of Credit for a Buyer Who Is Planning to Resell the Purchased Commodity to the Government at a Huge Mark-up?
Is an Exporter’s Acknowledgement of the Opening of the LC Qabd? Can the Goods Then be Resold?
Who Bears the Loss in a Mudarabah Venture?
Hibah In Inter-Bank Mudharabah Investment Contract
Dual Promise in Commodity Murabaha
Sale And Buy-back Agreement (Repo)
Contract Of Sale And Currency Trading
Deposit And Financing Products Based On Tawarruq
Can a Fee Be Charged to Transfer a Lease Agreement from One Tenant to Another?
Can a Tenant Cancel a Lease Agreement before Using the Usufruct?
A Promise to Buy or Sell Gold or Silver at a Future Date
Can the Bank Use Two Different Rates to Sell Foreign Currency?
Charging One Price for a Simple Sale of Foreign Currency and another Price for a Foreign Exchange plus Remittance
Forward Foreign Currency Transaction
Is the Exchange of Two Different Currencies Considered Like an Exchange of Gold for Gold?
Leasing an Asset to Someone Who May Use It for Unlawful Acts
Insurance Expenses Paid by Lessee
Who Bears the Expenses for Executing New Building Code Requirements Imposed after the Construction Contract Has Been Signed between the Subcontractor and the Bank?
Who Bears the Expenses for Inadvertent Mistakes in Administering a Building Contract?
Entry of the bank's real estate administration beside others into a tender offered by the bank for bidding
The conditional change in case works are not completed
Is It Permissible for KFH to Sell Goods Before Settling Their Invoice and Even Before They Reach KFH Providing That the Ownership of Goods is Recorded in KFH Name?
Is It Permissible to Oblige a Client to Buy a Car from KFH in Exchange for the Purchase of His Used Car by a Third Party?
Stipulating Conditions In An Agency Contract
Is It Permissible to Buy Photographic Equipment from a Company and Stipulate That the Company Should Take the Old Photographic Equipment That Is in Our Possession?
Is It Permissible to Buy Commodities by Cash from a Number of Commercial Firms And After Receiving Them Keep These Purchased Goods Separately in the Seller’s Warehouse?
Is It Allowed for KFH to Sell Gold to Its Customers After It Has Purchased It and Credited to the Owner’s Account?
Is It Permissible for KFH to Enter into a Contract with an Option Clause?
Is It Permissible for KFH to Enter into a Foreign Currency Contract with a Client Who Also Ordered KFH to Purchase Goods from a Foreign Seller and Sells them to Him on Deferred Basis?
Is It Permissible for KFH to Purchase Goods from an Exporter By Using the Commercial License of an Authorized Person Who Has Permitted KFH to Use His License?
A Stipulation That Doesn’t Impede the Legal Implication of the Deal
Can a Seller Stipulate That the Buyer Lease the Property to Him after Purchasing It?
Can an Islamic Bank Sell by Murabahah to a Usurious Institution That Will Probably Sell the Goods by Interest-Based Deals?
Is It Permissible for KFH to Enter into a Sale Contract with a Party Who Stipulates That KFH Should Not Sell the Commodity It Purchases to Other Whole Sale Companies?
What Is the Rule on Purchasing Gold Jewelry Set with Gems on a Deferred Basis?
Is It Permissible for Any Party of the Contract to Increase the Value of the Contract After Signing It and Concluding the Sale?
Is It Permissible to Specify a Period of a Binding Selling Offer Made By KFH to a Client?
Is It Permissible If the Producer Mistakenly Shipped the Commodity in the Name of the Customer Who Promised to Purchase It from KFH Which Ordered the Commodity in Its Name?
Is It Permissible to Buy Goods Which Are on a Ship at Sea by the Testimony of the Carrier and Then to Sell These Goods by Making the Carrier an Agent?
What Is the Date That Is Given Consideration in Determining the Conclusion of the Contract from a SharÊÑah Point of View?
Is It Permissible to Make a Contract on Goods with a Stipulation That the Seller Is Free From Responsibility for Any or All Defects?
Will Shipping the Goods on the Request of the Purchase Undertaker Be Considered as Only Taking Possession Without Ownership?
Is It Permissible to Sell a Good Calculated to Be of a Certain Amount on the Condition That If There Is Any Shortfall Then It Will Be Deducted from the Agreed Price?
What Is the Rule Regarding When the Buyer Does Not Accept Any Defect Upon Delivery?
Is It Permissible to Buy Imported Goods of Defined Specifications Which Are Still at Sea and Sell Them to a Trader? And Does Ijarah Cover All Types of Goods and Commodities?
What Are the Rules Regarding Conditions Governing Murabahah Contract?
Is It Permissible to Stipulate a Penalty in a Sale Contract?
What’s the Shariah Ruling Regarding Buying a Specific Commodity Based Upon a Customer’s Promise to Buy the Commodity by Deferred Payment?
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 166th Meeting
The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 156th Meeting
RESOLUTION No. 103 (6/11): MAINTENANCE CONTRACT
Does Islam Place a Limit on Profits?
Giving a Rebate for Early Payment in a Deferred Purchase Sale
How Does Resale Affect the Buyer’s Option to Annul the Original Sale?
A Customer Approaches the Bank for Murabahah after Having Concluded an Agreement with the Exporter
Resolution No. 105: The permissibility of borrowing in deutsche marks and lending in US dollars to avoid price volatility
Resolution No. 159: The Corporation selling gold, silver and currencies to its clients
Resolution No. 161: The permissibility of the seller of a commodity to Al Rajhi providing a guarantee of the party purchasing from Al Rajhi
Additional Conditions In A Murabahah Contract
Buying Commodities in One Currency and Selling it in Another Currency
Can a Murabahah Deal Be Combined with a Foreign Currency Exchange?
Can the Bank Sell the Murabahah Goods to the Purchase Orderer after They Are Loaded on the Ship?
Can the Primary Seller Give a Performance Award to the Murabahah Buyer for Retail Sales of Its Products and Ignore the Middleman?
Damage to or Loss of the Purchased Good
Deferred Guarantee in A Murabahah
Delay In Receiving The Goods
If the Party That Promises to Buy a Good and Resell It to a Customer Does Not Buy It, Is Any Compensation Due?
Increasing the Profit Rate on Subsequent Murabahah Deals Due to Late Payments in Earlier Deals
Is the Importer’s Acceptance of Some Items on the Exporter’s Quotation List a Contract That Prevents Effecting a Murabahah Contract
Joint Purchase Followed by a Murabahah Resale to One of the Partners
Making the Original Seller the Bank’s Agent to Sell the Purchased Products to a Previous Prospective Customer
Seller Free From Guaranteeing Any Defect?
The Murabahah Purchaser Returns Goods to the Original Seller
The Purchase Undertaker Wants to Avoid the Expense of a Third-Party Inspector of the Goods before Shipment
قرار رقم 132 (6/14) بشأن عقود الإذعان
التمويل العقاري
الصرف المؤجل للعملات المختلفة الجنس
ربط تقديم مساعدة مالية لمدرسة المكفوفين بتسديد ديون العميل المستحقة للبنك
توزيع الجوائز النقدية لودائع الاستثمار
Resolution No. 65/2/7: Deferred Instalment Sale
Delayed Payments In A Murabahah Contract
Double Guarantee in Murabahah
Issuance Of An LG Under A Murabahah Transaction
Pre-murabahah Transaction
Ensuring Proper Separation Of Contracts
A Service Warranty Agreement for a Car
If Some of the Goods Are Damaged, Must the Price Be Adjusted?
Deferring the Ownership Transfer of Shares Sold
Guaranteeing the Shares of Participants of Profit-Sharing Funds and Clearance Funds
Dual Promise in Commodity Murabahah
Hibah In Loan (Qardh)
Parallel Salam
A Penalty Clause for Late Payment
A Difference in Profit Share of Jointly Owned Property
A Sale and Buy Back without Collusion or Prior Agreement
Resolution No. 136 (15/2): Al-musharakah Al-mutanaqisah And Its Shari’ah Rules
Allocating Profit For Expenses Borne By One Of The Partners in a Musharakah
An Islamic Bank Paying a Customer’s Credit Card Bill from His Deposited Funds
Trading in a Used Car for a New One by Selling the Used Car to a Third Party Who Transfers the Payment to the New Car Seller
The Seller Stipulates That the Buyer Lease Back the Purchased Item to the Seller
The Issue Of The Original Ruling Of Contracts And The Permissibility Of Using Terms That Are Not Mentioned In The Sources Of Islamic Law
The Buyer Discovers a Defect or Shortfall in the Purchased Good
Stipulating No Liability for Defects in a Sale
Special Investment Account
Paying for Real Estate with a Combined Payment of Cash and Real Estate
Can Real Estate That Is Bought and Resold Be Registered Directly in the Final Buyer’s Name?
Swapping Two Pieces of Real Estate in a Single Contract
Selling a Sheep but Excluding the Skin from the Sale
Stipulating an Option to Annul a Sale after the Buyer Has Accepted the Original Offer
A Discrepancy is found in Murabahah Goods That Were Sold before Possessing Them
Selling a Sheep but Excluding the Skin from the Sale
Stipulating an Option to Annul a Sale after the Buyer Has Accepted the Original Offer

Other Concepts

“Halal” is an Arabic word which means allowed, permissible, lawful, authorized, and legitimate. The antonym of halal is “haram”, meaning impermissible, disallowed, and forbidden. The common term used in the industry is non-halal. In the study of Islamic jurisprudence, halal is defined as anything which is permitted by the Shari`ah (the Islamic law). The default ruling in Shari’ah is that all things are halal for humans to utilize unless specific evidence indicates that it is prohibited. This is as noted in few verses of the Quran, where Allah says: “It is He who created all that is in the earth for you...” (Al-Baqarah: 29). For further details, see ISRA library; CORRELATION OF THE HALAL INDUSTRY & ISLAMIC FINANCE: A WIN-WIN.

Types Of Guarantee That Can Be Taken

Zakah (Religious tax): Religious tax. An obligatory contribution which every wealthy Muslim is required to pay to the Islamic state or to distribute amongst the poor. According to Islam, zakat, which is the third pillar of Islam, purifies wealth and souls. Zakat is levied on cash, cattle, agricultural produce, minerals, and capital invested in business. Although there is a modern opinion that includes industrial capital in zakatable wealth, it is not the majority opinion. There are two types of zakat: zakat al fitr, which is payable by every Muslim who is able to pay at the end of Ramadan. This is also called zakah al-nafs (poll tax). Zakah al-mal is an annual levy on the wealth of a Muslim above a certain level. The rate paid differs according to the type of property owned.

Leasing Fund: Calculating Zakah
Leasing Investment Formula
Resolution No. 2: Zakah of Non-Fungible Objects and Lands Which Are Leased Out And Not Cultivated
Zakah on Leased Asset
Zakah on The Assets of a Factory
What Should Be Done with Small Cheques Issued to Accountholders Who Cannot Be Located or Contacted?
RESOLUTION No. 76/7/8: PROBLEMS OF ISLAMIC BANKS
SETTING TRADERS’ PROFITS by Dr Yūsuf al-Qaraḍāwī
قرار رقم: 165 (3/18) بشأن تفعيل دور الزكاة في مكافحة الفقر وتنظيم جمعها وصرفها بالاستفادة من الاجتهادات الفقهية
قرار رقم 143 (1/16) بشأن زكاة الحسابات المقيدة وشركات التأمين الإسلامية والتأمينات النقدية ومكافآت نهاية الخدمة
الصرف من صندوق الإيرادات قيد التصفية على موظفي البنك
إخراج الزكاة في حالة التأجير المنتهي بالتمليك
دفع الزكاة عن أرباح أموال المساهمين أو الاحتياطيات
Resolution No. 28 (3/4): Zakah Of Corporate Shares
Bonds, Interest Deposits And Unlawful Properties
Resolution No. 2 (2/2): Concerning Zakah on Real Estate and Non-Agricultural Leased Land
Resolution No. 1 (1/2): Concerning the Zakah of Debts

A letter of guarantee is issued to indemnify a beneficiary in the event that the guaranteed party fails to perform its contractual obligation in accord with the terms of the contract. By this guarantee the guarantor commits itself to pay the beneficiary a specified amount if the customer fails to fulfil its obligation. For further details, see ISRA Research Paper No. 60/2013.

Is It Permissible to Deliver the Goods Which Have Arrived Before Their Documents to the Client in a Murabahah Agreement?
Issuance Of An LG Under A Murabahah Transaction
LG from a Conventional Bank as Security in Murabahah
When the Goods Arrive before Their Shipping Documents
Can a Company in Partnership with an Islamic Bank Claim Reimbursement for Interest Charges on a Letter of Guarantee the Partner Got from a Conventional Bank without Consulting the Islamic Bank?

Literally: to be deserving of a right. Technically: the coming to light of the fact that something is someone's right that must be given to him. Al-Majallah defined it as “the coming to light of the fact that a person deserves a monetary right”. Entitlement is of two types: 1) istihqaq that invalidates the ownership of all parties; e.g., discovery that a property is an endowment or public property; 2) istihqaq that transfers the ownership from one person to another; for example, if it becomes known after a sale that the commodity is not owned by the seller, the buyer deserves his money back and the real owner takes back his property. For further details see ISRA Compendium.

Shari'ah Standard 8 of the AAOIFI Standards explains it as follows: 2/5/3; It is permissible for an institution, in the case of a binding promise by the customer, to take a sum of money as hamish jiddiyyah (i.e., a security deposit). This is to be paid by the customer at the request of the institution, both as an indication of the financial capacity of the customer and to ensure the compensation of any damage to the institution arising from a breach by the customer of his binding promise. For further details, see ISRA research paper No: 46/2012

Tanazul refers to the act of waiving certain rights in favour of another contracting party.

The Purchase Undertaker Wants to Avoid the Expense of a Third-Party Inspector of the Goods before Shipment

Literally: khiyar (option) is the noun derived from ikhtiyar (the act of choosing); in this case, choosing whether to conclude the sale contract or cancel it. Technically: the right of either party to conclude the contract or to cancel it due to a legitimate justification or a contractual agreement. For further details see ISRA Compendium.

Are Currency Option Contracts Legal?
When a Government Agency Hires a Contractor to Build Housing for Citizens, Is It Lawful for the Citizens to Request Changes to the Basic Plan if They Agree to Pay for Them?
Can Two Banks Agree to Allow Each Other Overdraft Privileges as Interest-Free Loans?
Discount For Early Payment
A Shari‘ah-Compliant Alternative to an Option Contract
Is It Permissible to Sell a Good Calculated to Be of a Certain Amount on the Condition That If There Is Any Shortfall Then It Will Be Deducted from the Agreed Price?
What Is the Rule Regarding When the Buyer Does Not Accept Any Defect Upon Delivery?
Is It Permissible for the Buyer in Murabahah to Agree with the Original Seller to Return the Goods If All of Some Were Not Sold?
How Does Resale Affect the Buyer’s Option to Annul the Original Sale?
Damage to or Loss of the Purchased Good
Shortfall in a Good Sold by a Calculation of the Amount
The Bank Uses the Purchase Undertaker’s Import License to Purchase a Foreign Good
The Buyer Discovers a Defect in the Goods
The Murabahah Purchaser Returns Goods to the Original Seller
The Purchase Undertaker Wants to Return Unsold Goods to the Original Seller
Ensuring Proper Separation Of Contracts
Purchase Option Such That the Seller Will Only Acquire Possession of the Good if the Buyer Exercises the Option
Signing a Contract to Sell Something to the Government before Owning the Product
Stipulating an Option to Annul a Sale after the Buyer Has Accepted the Original Offer
Signing a Contract to Sell Something to the Government before Owning the Product
Stipulating an Option to Annul a Sale after the Buyer Has Accepted the Original Offer

Literally: to remove and eliminate. In contracts, it means to revoke the contract. Technically: to terminate the contract and revoke its effects with the consent of both parties. Jurists disagreed whether iqalah is an annulment of the contract or a new contract. For further details see ISRA Compendium.

A Client Pays Full Rent at the beginning of the Month but Leaves in the middle
A Tenant Requests Early Termination of a Lease Agreement
Buying an Asset That Is Leased to a Third Party
Can a Fee Be Charged to Transfer a Lease Agreement from One Tenant to Another?
Can a Tenant Cancel a Lease Agreement before Using the Usufruct?
Can the Customer Ask the Bank to Take His Place in a Construction Contract?
Can a Broker’s Fee Be Recovered if a Sale is Terminated?
Iqalah
A Pre-Existing Contract Between the Original Seller and the Purchase Undertaker in Murabahah
Is It Allowed to Charge a Late Penalty on a Credit Card Holder if He Misses a Payment?
A Prospective Customer Has Already Made a Down Payment to the Supplier
Can Murabahah Occur if the Prospective Buyer Has Already Given the First Seller a Down Payment?
Charging a Fee for Annulling a Sale or Transferring Registration of Ownership
How to Terminate a Pre-Existing Contract in Order to Effect a Murabahah Sale?
Seller Free From Guaranteeing Any Defect?
The Buyer Discovers a Defect in the Goods
The Intermediate Seller Lacks Detailed Knowledge of the Imported Goods
السحب المبكر من وعاء المضاربة
Hibah In The Takaful Industry
Cancelling A Murabahah Contract
What Is to Be Done if the Supplier Is Unable to Deliver Some of the Sold Goods?
What Is to Be Done in Murabahah about Anomalies in Delivery of the Subject of the Sale?
The Buyer Discovers a Defect or Shortfall in the Purchased Good
Stipulating No Liability for Defects in a Sale
Stipulating an Option to Annul a Sale after the Buyer Has Accepted the Original Offer
Stipulating an Option to Annul a Sale after the Buyer Has Accepted the Original Offer
What is the Rule When an Unrestricted Investment Deposit Holder Wants to Withdraw His Deposit before the End of the Deposit Period?

Literally: to substitute one thing for another. Each of the items is called ‘iwad, a’wad. Technically: financial compensation paid for damage done to another. the compensation for fungible goods is to give a similar thing, whereas in nonfungible goods the value is to be paid. If the damage is partial, experts should evaluate the damage and determine the appropriate compensation. For further details see ISRA Compendium.

Who Is Liable for Damages to Rental Property?
Claiming Legal Expenses From The Customers
Forward Foreign Currency Transaction
Giving Hibah As Compensation For Delayed Payments
Ta'widh On Judgement Debt
A Seller Agrees to Accept Expired Products from the Buyer and Replace Them with New Products
Is It Permissible for Any Party of the Contract to Increase the Value of the Contract After Signing It and Concluding the Sale?
Is It Permissible to Contract a Sale of Goods That Have a Defect on the Condition That the Defect Be Explained to the Him Before the Contract Is Concluded?
Is It Allowed to Sell a Government-Issued License to Undertake a Project?
Any Link between the Insurance Settlement for Damaged Goods and the Seller’s Settlement with the Purchase Undertaker?
Damage to or Loss of the Purchased Good
Defects In The Subject Matter
Insurance Compensation for Damaged Goods Exceeds the Actual Loss; What to Do with the Excess?
Is It Lawful for the Bank to Ask the Purchase Orderer to Guarantee It against Damages Caused to the Bank by the Primary Seller?
Overcompensation by the Insurance Company above the Actual Damage
The Buyer Guarantees the Reliability of a Fraudulent Exporter. Who Is Liable?
The Purchase Undertaker Requests the Intermediate Seller to Pass on Insurance Compensation for Damaged Goods
غرامة التأخير للعملاء في حالة المماطلة في سداد مبلغ الاعتماد
فرض غرامة تأخير على العميل الذي لا يفي بالتزاماته
غرامة التأخير والمماطلة في السداد
نكول الواعد بالشراء في شراء العملات
عقد الصرف الآجل
تحميل الوعاء العام مصاريف إصدار بطاقة التقسيط
تعويض العميل من قيمة البضاعة التالفة قبل تسلمه إياها
قيام البنك عند تلف البضاعة المستوردة باستيفاء مبلغ من شركة التأمين يزيد عن المبلغ الذي دفعه البنك
تحويل عملية مرابحة فاسدة إلى قرض حسن
مدى جواز تسجيل المبالغ الزائدة عن أصل الدين ضمن أرباح البنك
(كسر الوديعة (التخارج
Delayed Payments In A Murabahah Contract
Resolution No. 50 (2/6): Rulings on Installment Sales
Various Issues
What Is to Be Done if the Supplier Is Unable to Deliver Some of the Sold Goods?
Can a Credit Cardholder Refuse the Life Insurance Contract That Comes with It?
Commissions on Third-Party Insurance Policies
Fire Insurance
Full Compensation for a Damaged Insured Item That Has Not Been Fully Paid for
If Some of the Goods Are Damaged, Must the Price Be Adjusted?
If the Value of Insured Property Fluctuates, What Should the Insured Value Be?
Insurance against Investment Risks
Insurance against Vandalism
Insuring Cars and Other Items
Insuring Cash at Bank Branch Offices
Insuring Valued Possessions against Fire, Theft, Etc.
Is Comprehensive Auto Insurance Allowed?
Marine Insurance for 110% of the Goods’ Value, Taking into Account Shipping Expenses among Other Factors
The Permissible Limits of Insurance Compensation
Transferring the Right to Benefit from Insurance to a Purchase Undertaker after the Sale
Transporting Goods with a Guarantee against Loss
Various Types of Banking Insurance
What Compensation Amount Should Be Obtained When Insuring Furniture against Fire?
When the Award for Personal Accident Insurance Exceeds the Diyah
Imposition Of Ta'widh In Islamic Finance
Accepting Hibah from The Customers
A Penalty Clause for Delay in a Murabahah Contract
Can a Penalty Clause for Late Payment Be Added to an Islamic Banking Contract?
What if an Unscrupulous Debtor Delays Payment to an Islamic Bank because It Doesn’t Charge Interest?

Literally: what must be paid. Technically: what must be paid as a disciplinary measure or compensation. Some said: what is given for fear of damage and hardship. It is also said: it is what needs to be paid as a burden, not as compensation. For further details see ISRA Compendium.

Can a Contractor Be Fined for a Delay in Completing a Job if No Damage Results from the Delay?
Penalty should be proportionate to actual damage
What is the Proof That a Bank Can Charge for the Expenses of Issuing a Letter of Guarantee?
Ta'widh On Judgement Debt
Can a Bank Stipulate Up-Front That, if a Customer Misses a Payment, He Must Pay Two Instalments?
Is It Allowed to Charge a Late Penalty on a Credit Card Holder if He Misses a Payment?
Fine Imposed by The Customs
صيغة الشرط الذي يضمن بالعقود لإلزام العميل بالزيادة التي تضاف لحساب مخصص الديون المتعثرة
إنفاق حصيلة الإيرادات الناتجة من الفوائد المحرمة وغرامات المدينين المعسرين المماطلين
غرامة التأخير للعملاء في حالة المماطلة في سداد مبلغ الاعتماد
(الغرامات المفروضة على المصارف من قبل البنك المركزي (بنك السودان
فرض عقوبات في حالة مماطلة المرابح
فرض غرامة تأخير على العميل الذي لا يفي بالتزاماته
غرامة التأخير والمماطلة في السداد
نكول الواعد بالشراء في شراء العملات
عقد الصرف الآجل
Delayed Payments In A Murabahah Contract
Murabahah Debt Restructuring with Central Banks as Guarantor
Resolution No. 50 (2/6): Rulings on Installment Sales
LG from a Conventional Bank as Security in Murabahah
Imposition Of Ta'widh In Islamic Finance
Judgement Of The Court With Regard To Penalties On Delayed Payments
Accepting Hibah from The Customers
A Penalty Clause for Delay in a Murabahah Contract
A Penalty Clause for Late Payment
Is it Lawful to Financially Penalize a Rich Debtor Who Delays Payment?
What Can an Islamic Bank Do if a Debtor Who Can Afford to Pay Delays Payment?
What if an Unscrupulous Debtor Delays Payment to an Islamic Bank because It Doesn’t Charge Interest?
Selling to Someone Who Will Resell Using Interest-Based Contracts
Selling to Someone Who Will Resell by Charging Interest
Who Bears Unexpected Demurrage Charges in a Murabahah Contract?
Can a Company in Partnership with an Islamic Bank Claim Reimbursement for Interest Charges on a Letter of Guarantee the Partner Got from a Conventional Bank without Consulting the Islamic Bank?
What is the Ruling on Selling Cars to a Usurious Institution?

Literally: The Arabic word refers to even as the opposite of odd. Technically it is the right to own an immovable by payment of the price due even/ with legal force. The pre-emptor is called the shafi’; the other party, the owner who is forced to sell, is called ma’khudh minhu. The property is called mashfu’ fihi. For further details see ISRA Compendium.

Makhārij: Linguistically, makhārij is the plural of the noun makhraj, which means “exit”. Based on the authors’ limited research in the classical books of fiqh and uṣūl al-fiqh, scholars have not provided a specific definition of the term makhārij. The Hānafī imām Muḥammad al-Shaybānī is among the earliest scholars to have used this term in his essay al-Makhārij fī al-Ḥiyal; however, he did not define the term. The word makhārij was not used by al-Shaybānī in his other writings; rather, he used “ḥiyal”. According to al-Mawsūʿah al-Fiqhiyyah (1404-1427 H.: 36/240), jurists use makhārij specifically for permissible ḥiyal. This is supported by a statement by al-Sarakhsī (2000: 30/371) that the majority of scholars consider the use of ḥiyal in the form of makhārij to be permissible. For further details see: ISRA Research Paper; The Parameters of Hiyal in Islamic Finance

Hiyal is the plural form of Hilah (Stratagen). It literally connotes: cleverness and astuteness in handling and discharging matters by secret methods. One who uses a stratagem is called muhtal. Technically: it is used in the same sense. Stratagems are divided into two types: 1) legal stratagems are used in order to carry out the orders of the Lawgiver and avoid His prohibitions; 2) illegal stratagems are used to indulge in forbidden acts or escape from legal duties.

Can a False Statement Be Made to the Authorities to Facilitate Tawarruq?
A Murabahah Deal Where the Original Seller Turns out to be the Spouse of the Purchase Undertaker
A Pre-Existing Contract Between the Original Seller and the Purchase Undertaker in Murabahah
Resolution No. 112: The permissibility of transferring the title of the leased property to the lessee and perfecting a lien on the property

The linguistic meaning of ta'awun is mutual cooperation, shared shared assistance, and helping one another. For further details see: ISRA Research Paper No.71/2014.

Resolution No. 9 (9/2): Concerning Insurance And Reinsurance
What Is the Rule for Pictures Printed on Certain Food Items Such as Pictures of Humans or Animals?
Is It Permissible to Trade in Playing Cards and Tobacco?
Is It Permissible for Men to Use Gold?
What Is the Shariah View Regarding the Purchase and Sale of the Holy Quran?
Is It Permissible to Trade in Children’s Toys That Comprise of Dimensional Images?
Is It Permissible to Import Meat and Chicken from the United States of America?
Resolution No. 107 (1/12): "Delivery and Tendering Contracts"
RESOLUTION No. 100 (3/11): ISLAM FACE TO FACE WITH MODERNISM
RESOLUTION No. 99 (2/11): SECULARISM
RESOLUTION No. 101/3/10: SACRIFICIAL ANIMALS AND SHARI'A RULES FOR SLAUGHTERING THEM
RESOLUTION No. 84/1/9: GOLD TRADE, SHARI'A SOLUTIONS FOR COMBINED CASH AND TRANSFER PAYMENTS
Deferred Sale of a Precious Metal Other Than Gold or Silver
it Allowed to Use Music in Advertisements?
What is the Shari‘ah Ruling on Trading in Musical Instruments?
Can an Islamic Bank Hold Shares in a Company That Produces Da’wah Materials That Contain Music?
TIME SHARING قرار رقم 170 (8/18) بشأن عقد التملك الزمني
قرار رقم 168 (6/18) بشأن تحديد سن البلوغ وأثره في التكليف
قرار رقم 132 (6/14) بشأن عقود الإذعان
سفر المرأة بغير محرم
اقتناء أضحية العيد من صندوق الإيرادات قيد التصفية
شطب الديون الهالكة في حالة الأموال التي تدفع لأوجه الخير
Trading in Children’s Dolls
Selling Platinum for Deferred Payment
Selling Goods That Have Pictures of People or Animals on the Packages
Selling Goods in Packaging with Human or Animal Images
Stipulating that Customers not Deal with Competitors
Selling Human Hair to the Textile Industry
Selling Human Hair to the Textile Industry

اتمام عملية البيع على اساس بوليصة الشحن بتظهيرها
** إعطاء حوافل مادية وعيلية لمندوبي وكالات السيارات
What Is the Ruling on Trading Ornamental Statues and the Like?

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