Loan. Lit: to cut or cut off. It is so called because the property (in terms of wealth) of a person (the lender) is cut off and transferred to a needy person (the borrower)without expecting any return or profit. The borrower is required to repay only the principal amount to the lender on demand. The Qur'an encourages people to contribute generously to social welfare and helping the needey in society, and "if the debtor is in difficulty, grant him time till it is easy for him to repay. But if you remit it by way of charity that is the best for you...". As charging interest is prohibited, Qard is always associated with with 'Hasan', which literally means 'kindness to others', and referred to a a voluntary act with good intention. Qard should not be confused with Dayn, which refers to debt arising as result of a credit transaction. Loan under Shari'ah can be classified as Salaf and Qard, the former being a loan for a fixed time and the latter on demand. Also see Qard Hasan and Loans with Service Charge.
Qard al hasana
See Qard Hasan
Qard Hasan (1)
A virtuous loan. Loan in the meaning of a virtuous loan that is interest-free and extended on goodwill basis, mainly for welfare purposes, the borrower is only required to pay back the borrowed amount. The loan is payable on demand and repayment is obligatory. But if a debtor is in difficulty, the lender/creditor is expected to extend time or even to voluntarily waive repayment of the whole or a part of the loan amount. Islam allows loan as a form of social service among the rich to help the poor and those who are in need of financial assistance. Qard Hasan may be viewed as something between giving charity or gift and giving a loan (qard). A debtor may voluntarily choose to pay an extra amount to the lender/creditor over the principal amount borrowed (without promising it) as a token of appreciation. This type of loan does not violate the prohibition on Riba, since it is the only type of loan that does not compensate the creditor for the time value of money. Such loans have not been uncommon in human history among peers, friends, family and relatives. Also known as Qard al Hasana. Also see Loans with Service Charge.
Qard Hasan (2)
An interest-free loan given for either welfare purposes or for fulfilling short-term funding requirements. The borrower is only obligated to repay back the principal amount of the loan. Most of the Islamic banks provide such interest free loans ( Qard Hasan) to their customers in real need. If this practice is not possible on a significant scale, even then, it is adopted at least to cover some needy people, including among the bank's customers and students. Islamic view about loan ( Qard) is that it should be given to borrower free of charge. A person is seeking a loan only if he is in need of it. Hence, it is a moral duty of the lender to help his brother who may be in need. The borrower should not make an effort to take advantage of somebody needs. He should help the needy by lending him money without any charge. The reward of this act is with the God. Hence, it is referred as Qard Hasan (benevolent loan) which signifies the benevolent nature of the act of lending.
Lit: Sale of the real value of the goods; value includes the quantity and quality of the goods, and also is a reflection of a free market and it is the reflection of a just transaction. Tech: Sale through a broker to realise a certain minimum price and allowing the broker to keep anything over and above that price.
Lit.: gambling. Technically an agreement in which possession of a property is contingent upon the occurrence of an uncertain event. By implication it applies to those agreements in which there is a definite loss for one party and definite gain for the other without specifying which party will gain and which party will lose. Another word for Maysir.
"Non fungible goods, i.e. they are goods which are not interchangeable"
The practices of various Islamic banks in this respect differ. Some Islamic banks provide the privilege of interest free loans only to the holders of investment account with them. Some extend to all bank clients. Some restrict it to needy students and other economically weaker sections of the society. Yet some other Islamic banks provide interest free loans to small producers, farmers and entrepreneurs who are not qualified to get finance from other sources. The purpose of these loans is to help start them their independent economic life and thus to raise their incomes and standard of living.
An Arabic term meaning a placement of capital for an associate to use in a trading venture. Synonym or another name formudarabah.
The process of analogical reasoning as applied to the deduction of juridical principles from the Qur'an and the Sunnah (the normative practice of the community). With the Qur'an, the Sunnah, and ijma (scholarly consensus), it constitutes the four sources of Islamic jurisprudence. As a result of this method, the ruling of the Sunnah and the Qur'an may be used as a means to solve or provide a response to a new problem that may arise. This, however, is only the case providing that the set precedent or paradigm and the new problem that has come about will share operative causes ( illah). The illah is the specific set of circumstances that trigger a certain law into action. Both Sunni branch of Islam andShi'a branch of Islam share Qur'anicinterpretation, the Sunnah, and Ijma (consensus) as sources of Islamic law, although the two sects differ significantly with regards to the manner in which they use these sources. The sects also differ on the fourth source. Sunni Islam uses qiyasas the fourth source, whereas Shi'a Islam uses aql (intellect).
The sacred book of Islam. The literally meaning is "the recitation". Muslims believe the Qur'an is God's final message to all of mankind. The Qur’an is a book which emphasises deed rather than idea. The rules laid down in The Qur’an are universal and not restricted to one ethnic group or a specific area or time. The Qur’an is fundamentally different from all other sacred scriptures: its stress on reason as a valid way to faith as well as its insistence on the inseparability of the spiritual and the physical (and, therefore, also social) spheres of human existence: the inseparability of daily actions and behaviour of human beings, however "mundane", from the spiritual life and destiny. “The Qur'an is a revealed Book in the spiritual tradition of the Torah and the Gospel transmitted by Moses and Jesus. Connecting itself and these distinguished predecessors to even earlier dispensations of original religion, the Qur'an represents its teachings as confirming and clarifying the truth of what was in those messages. As the last link in a chain of revelation going back to time immemorial, even to the very origin of humankind, the Qur'an has the special function of recollecting the essential message of all revealed Books and distinguishing this from the opinions and reactions later interpolated into ancient texts whose original dispensation had taken place in remote and even unknown times.” [The Essential Koran: The Heart of Islam, Translated & Presented by Thomas Cleary]