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Glossary of Financial Terms  - G
 
This glossary is not limited to Islamic terms and
contains Arabic and English terms that are also referred to
in the study of Islamic economics, banking and insurance.
 
 
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Garam
Damage, Loss, as in Takaful.
Ghaban
Misappropriation or defrauding others in respect of specifications of the goods and their prices.
Ghaban-e-Fahish
Excessive profiting with deception, exorbitant price.
Gharar (1) 
Lit: uncertainty, hazard, chance or risk.  Technically, sale of a thing which is not present at hand; or the sale of a thing whose consequence or outcome is not known; or a sale involving risk or hazard in which one does not know whether it will come to be  or not, such as fish in water or a bird in the air. It is an exchange in which one or more parties stand to be deceived through ignorance of an essential element of the exchange. Thus it refers to an element of absolute or excessive uncertainty in any business or contract. Gambling (qimar) is a form of gharar because the gambler is ignorant of the result of the gamble. ( gharar one of the three fundamental prohibitions in Islamic finance, the other two being riba and maysir).  The Hanafi  school of Islamic jurisprudence defined gharar as "that whose consequences are hidden." The Shafi'i school defined gharar as "that whose nature and consequences are hidden" or "that which admits two possibilities, with the less desirable one being more likely." The Hanbali school defined it as "that whose consequences are unknown" or "that which is undeliverable, whether it exists or not." Ibn Hazn of the Zahini school wrote " Gharar is where the buyer does not know what he bought, or the seller does not know what he sold.'
Gharar (2)

The root Gharar denotes deception; an exchange in which one or both parties stand to be deceived through ignorance of an essential element of exchange. It also refers to ambiguity present in a contractual relationship as to the consideration and the terms of the contract that can lead to a dispute. Gharar is divided into three types, namely Gharar Fahish (excessive to which Gharar normally refers), which vitiates the transaction, Gharar Yasir (minor) which is tolerated and Gharar Mutawassit (moderate) which falls between the other two categories. Any transaction can be classified as forbidden activity because of excessive gharar.  In general, this prohibits the selling of goods or services that the seller is not in a position to deliver or the making of a contract which is conditional on an unknown event.   Due to the uncertainty and risk involved, it makes a transaction similar to gambling. The prohibition on Gharar is often used as the grounds for criticism of conventional financial practices such as short selling, speculative trading and derivatives.

Gharar (3)
"Deception through ignorance by one or more parties to a contract. Gambling is a form of gharar because the gambler is ignorant of the result of the gamble. Gharar can occur in several ways, all of which are haram. The following are some examples:
* Selling goods that the seller is unable to deliver
* Selling known or unknown goods against an unknown price, such as selling the contents of a sealed box  
* Selling goods without proper description, such as shop owner selling clothes with unspecified sizes  
* Selling goods without specifying the price, such as selling at the 'going price'  
* Making a contract conditional on an unknown event, such as when my friend arrives if the time is not specified  
* Selling goods on the basis of false description
* Selling goods without allowing the buyer the properly examine the goods"
Gharar (4)
"Uncertainty in a contract of exchange as to the existence of the subject matter of the contract and deliverability, quantity or quality of the subject matter. It also involves contractual ambiguity as to the consideration and the terms of the contract. Such ambiguity will render most contracts invalid. The root Gharar denotes deception; an exchange in which there is an element of deception either through ignorance of the goods, the price, or through faulty description of the goods.  Thus, one or both parties stand to be deceived through ignorance of an essential element of exchange. Gambling is a form of gharar because the gambler is ignorant of the result of the gamble.  Speculative risk-taking in commerce, which involves the investment of assets, skills and labor, is not considered similar to gambling. This is because the buyer is engaged in a transaction aimed at making profit through trading and not through dishonest appropriation of the property of others. The prohibition on gharar is often used as the grounds for criticism of conventional financial practices such as short selling, speculation and derivatives."
Gharar-fil-Sifah
Uncertainty with respect to characteristics of the goods.
Gharar-fi-al-Ajal
Uncertainty with respect to time of the delivery.
Gharar-fi-al-Miqdar
Uncertainty with respect to quantity of goods.
Gharar-fi-al-Taslim
Uncertainty with respect to delivery of the goods.
Gharar Yasir
A small amount of gharar that may be unavoidable.
Gharim
A debtor who does not possess the fund with which to repay his/her debt. According to the Hanifi jurists, a gharim is one who whose funds, after repayment of his debt, would not to equal the nisab. The Shafi and Maliki jurists divide gharim into two types: i) those whose debts were incurred in their own benefit and 2) those whose debts were incurred benefiting others. The gharimun (pl. for gharim) are one of the eight groups mentioned in the Qur'an as legitimate recipients of the Zakat funds.
Ghosh
Feud, as in Takaful.
Guaranteed Loan A pledge to cover the payment of debt or to perform some obligation if the person liable fails to perform. When a third party guarantees a loan, it promises to pay in the event of a default by the borrower.
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