Bai’ al-Dayn (debt trading)
Refers to the buying and selling in the secondary markets of debt certificates, securities, trade documents and papers which are Shariah compliance. Only documents evidencing real debts arising from bona fide merchant transactions can be traded.
Bai’ al-Inah (sell and buy back)
It refers to a contract which involves sell and buy back transactions of an asset by a seller to the customer. The seller will sell the asset on cash basis but the customer will buy back the asset on deferred payment at a price higher than the cash price.
Ijarah Thumma al-Bai’ (leasing and subsequently purchase)
Refers to an Ijarah (leasing/renting) contract to be followed by Bai' (purchase) contract. Under the first contract, the hirer leases the goods from the owner at an agreed rental over a specified period. Upon expiry of the leasing period, the hirer enters into a second contract to purchase the goods from the owner at an agreed price.
Ijarah (leasing)
Refers to an arrangement under which the lessor leases equipment, building or other facilities to a client at an agreed rental fees or charges, as agreed by both parties.
Qard (interest-free loan)
A loan extended on a goodwill basis and the borrower is only required to repay the principal amount borrowed. However, he may pay an extra amount at his absolute discretion, as a token of appreciation.
Bai’ Salam (future delivery)
Refers to an agreement whereby payment is made in advance for delivery of specified goods in the future.
Bai’ Istijrar (supply contract)
Refers to an agreement between the client and the supplier, whereby the supplier agrees to supply a particular product on an on going basis, for example monthly, at an agreed price and on the basis of an agreed mode of payment.
Kafalah (guarantee)
Refers to a contract of guarantee by the contracting party or any third party to guarantee the performance of the contract terms by contracting parties.
Rahnu (collateralised borrowing)
Refers to an arrangement whereby a valuable asset is placed as collateral for debt or right of claim. The collateral may be disposed in the event of default.
Wakalah (nominating another person to act)
Refers to a situation, where a person nominates another person to act on his behalf.
Hiwalah (remittance)
Refers to a transfer of funds/debt from the depositor's/debtor's account to the receiver's/ creditor's account whereby a commission may be charged for such service.
Sarf (foreign exchange)
Refers to the buying and selling of foreign currencies.
Ujr (fee)
Refers to commissions or fees charged for services.
Hibah (gift)
Refers to gifts award voluntarily in return for any transactions given or provided.
Source : Bank Negara Malaysia
