Investing In Islamic Funds: A Practitioner's Perspective

Glossary of Islamic Finance1

AAOIFI

Accounting and Auditing Organization for Islamic Financial Institutions: Bahrain-based Islamic international standard setting body established in 1991 for Islamic corporations and the industry. Members include central banks, Islamic financial institutions and other industry participants.

Akhirah

The hereafter.

Akhlaq

Virtue, morality and manners in Islamic theology.

‘Alim

Shariah jurists. Alternative spelling: Ulema.

Al-wa’d bi al-bai’

Promise to sell.

Al-wa’d bi al-syira’

Promise to buy.

Amanah

Reliability, trustworthiness, loyalty, honesty. Alternative spelling: Amana. An important value of Islamic society in mutual dealings. It also refers to deposits in trust, where a person may hold property in trust for another.

‘Amil

Agent. Someone who deserves compensation for completing a task, such as a mudarib in a Mudarabah or a Zakat collector.

Aqd

Contract.

Aqidah

Set of beliefs.

Bai Ajil bi Ajil

Delayed-for-immediate sale. The sale price is paid immediately and delivery of the sale item is delayed. Synonymous with Bai al Salam.

Bai al Arboon

Deposit-secured sale. A sale agreement in which a security deposit is provided in advance as part payment towards the price of the commodity. The deposit is forfeited if the buyer does not meet his obligation.

Bai al Inah

Sale and buy-back. The sale and buy-back of an asset for a higher price than that for which the seller originally sold it. A seller immediately buys back the asset he has sold on a deferred ...