Promise, undertaking. A promise, such as is found in purchase and sale undertakings used in certain Islamic finance transactions; a promise to buy or sell certain goods in a certain quantity at a certain time in future at a certain price.
Promise which does not create contractual rights and obligations, may be binding or unbinding.
Safekeeping of goods with a discount on the original stated cost. An Islamic bank acts as the keeper and trustee of depositors' funds and guarantees to return the entire deposit, or any part of it, on the depositor's demand. Also see Wadiah.
Custody. Lit: safekeeping. In Islamic banking, wadiah refers to the deposited property, the acceptance of sums of money for safe-keeping in a Shari'ah-compliant framework, under which it will be repaid. Islamic banks use the concept of Wadiah(and Amanah) to accept deposits from customers. A bank is deemed as a keeper and trustee of funds and becomes wholly responsible and liable for its safekeeping with a guarantee refund of the entire amount of the deposit, or any part of the outstanding amount, when the depositor demands repayment. The bank may at its discretion and in certain circumstances reward the customer with a payment in the form of Hibah as appreciation for keeping the funds with the bank. Also termed as Al Wadiah and Wadia. Also see Amanah.
God's Unity. Arabic term referring to the doctrine of Oneness (of God). Islam holds God ( Allah) is One ( wahid) and Unique (ahad).
Obligatory, compulsory, mandatory.
Agency. A contract of agency in which one party appoints another party to perform a certain task on its behalf, usually for payment a fee or commission. An agency arrangement without provision for payment of a fee cannot be considered irrevocable, thus allowing an agent the right to terminate the agency at any time. Can be commutative or non-commutative. A bank may charge fees or providing certain services to its customers; the bank can also pay a fee to perform an activity on behalf of the bank, such as an agent to take delivery of goods or investing the bank’s funds. Also termed as Al-wakala.
Wakalah bil ajr
Same as Wakalah.
Wakalatul Istismar / Ijaratu Alshkas
Agency services for management of funds against a pre-agreed fee irrespective of the profit or loss on the relevant portfolio.
In a wakala contract, a representative (agent), who acts on behalf of the principal/investor.
Lit.: hold, confinement or prohibition. Technically appropriation or tying-up of a property in perpetuity so that no propriety rights can be exercised over their use. An endowment of charitable trust in the meaning of holding certain property and preserving it for the confined benefit for a certain charitable objective and prohibiting any use or disposition of it outside that specific objective. This definition accords perpetuity to waqf, i.e., it applies to non-perishable property whose benefit can be extracted without consuming the property itself. Therefore waqf widely relates to land and buildings. The waqf property can neither be sold nor inherited or donated to anyone. There are three main kinds of Waqf in Islamic jurisprudence: religious waqf, philanthropic waqf and family waqf.
Statement attesting that certain statements are true. For instance, the borrower may warrant that it is a corporation, that it is entering into the agreement legally and that financial statements supplied to the bank are true.
Technically, means current assets and current liabilities. The term is commonly used a synonymous with net working capital. The term often also is used to refer to all short-term funding needs for operations (excluding debt service and fixed assets). A company's investment in current assets that are used to maintain normal business operations. Net working capital, which is the excess of current assets over current liabilities is also interchangeable with working capital. Both reflect the resources in circulation to meet operating needs and obligations as they come due.
When an investment, such as a loan, becomes seriously delinquent or in default and is determined to be uncollectible, the lender may choose to charge the outstanding investment amount as an expense or a loss.