Islamic Finance For Dummies

Appendix

Glossary

Accounting & Auditing Organization for Islamic Financial Institutions (AAOIFI): An independent, not-for-profit organization supported by governments, central banks, and financial institutions that ensures that all the participants in the Islamic finance industry conform to certain sets of rules and regulations.

agency functions: Commercial bank activities in which a bank acts as an agent for a customer. These tasks include collecting and paying checks, buying stocks and bonds, and corresponding on behalf of the customer.

Allah: Preferred reference among Muslims for the one true God. The word doesn’t have a gender or a plural form, making it the preferred term for even non-Arabic-speaking Muslims.

amana: A trust deposit. The amana contract is similar to the wadia contract except that the amana trustee isn’t allowed to use the asset given for safekeeping. The trustee is held liable if he is found to be negligent with the asset’s safekeeping. See also wadia

’aqd: Arabic term for contract, which is a transaction between two or more parties regarding a particular matter. Per Islamic commercial law, a valid contract must include six specific elements to take place: offerer, offeree, offer, acceptance, subject matter, and consideration.

audit committee: Members of a bank’s (or any other corporation’s) board of directors who supply information to the board regarding the bank’s financial reporting, disclosures, and risks.

Bank of International Settlements (BIS): An association ...