Principes de droit musulman
Special Comment
Credit Research
June 2008
Moody’s Global
Table of Contents:
Glossary of Arabic Terms Used in Islamic Finance 1 The Five Core Principles of Islamic Banking and Finance 3
Islamic Finance: Glossary of Usual Terms and Core Principles
Glossary of Arabic Terms Used in Islamic Finance
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adl: a trusted and honourable person, selected by both parties to a transaction. Somewhat analogous to a trustee. amana/amanah: literally means reliability, trustworthiness, loyalty and honesty, and is an important value of Islamic society in mutual dealings. It also refers to deposits in trust, sometimes on a contractual basis. bai/bay: contract of sale, sale and purchase. bai al-salam: advance payment for goods. While normally the goods need to exist before a sale can be completed, in this case the goods are defined (such as quantity, quality, workmanship) and the date of delivery fixed. Usually applied in the agricultural sector where money is advanced for inputs to receive a share in the crop. fatwa (pl. fatawa): an authoritative legal opinion based on the Shari’ah. fiqh: practical Islamic jurisprudence. Can be regarded as the jurists’ understanding of the Shari’ah. gharar: uncertainty in a contract or sale in which the goods may or may not be available or exist (e.g. the bird in the air or the fish in the water). Also, ambiguity in the consideration or terms of a contract – as such, the contract would not be valid. hadith: the narrative record of the sayings, doings and implicit approval or disapproval of the Prophet.
19 Khalid Howladar
Vice President/Senior Credit Officer
London
44.20.7772.5454
13 Anouar Hassoune
Vice President/Senior Credit Officer
Special Comment
Moody’s Global Credit Research
Islamic Finance: Glossary of Usual Terms and Core Principles halal: permissible, allowed, lawful. In Islam, there are activities, professions, contracts and transactions that