Understanding Islamic Finance - Doha Academy of Tertiary Studies

494 Understanding Islamic FinanceAlso, another name of Salam – forward sale; (ii) Forebears – jurists and scholars of early periods ofIslam.Sanadāt: Certificates of investment – another name for Sukuk.Sarf: Contract in which both exchange items are gold, silver or any monetary units.Saw´ām-bi-sawaa´: Equal for equal (in exchange transactions).Sharī´ah: Divine guidance as given by the Holy Qur’ān and the Sunnah of the Prophet Muhammad(pbuh); embodies all aspects of the Islamic faith, including beliefs and practice.Shart-e-Jazāi: A clause that a purchaser can put into an Istisna‘a agreement whereby the price of the itembeing manufactured would decrease in the case of a delay in delivery by the seller/manufacturer wherebythe delay benefits the purchaser – unlike all other modes in which any penalty imposed due to default ordelay in payment of liabilities goes to the charity account and not to the banks’P&Laccounts.Shirkah: Commingling by two or more people of their money or work or obligations to earn a profit ora yield or appreciation in value and to share the loss, if any, according to their proportionate ownership.In the present Islamic banking terminology, it may include both Musharakah and Mudarabah andvarious kinds of Musharakah like business/commercial partnership, partnership by ownership andpermanent or redeemable partnership.Shirkatul‘aqd: Commercial/business partnership – a contract between two or more people who launcha business or an enterprise to make profits.Shirkatulmilk: Partnership by ownership or in the right of ownership; not for business.Shuf‘ah: Pre-emptive right of a partner in a joint ownership or a neighbour in sale of landed properties.Suftajah: An instrument in traditional Islamic finance used for cash transfer/payment which involvedthe act of depositing a certain amount of money with someone for settlement or to the benefit of thedepositor or his representative at another place or in another country. A type of instrument used for thedelegation of credit during the Muslim period, especially the Abbasides period. It was used to collecttaxes, disburse government dues and transfer funds by merchants.Sukuk: Certificates of equal value representing undivided share in ownership of tangible assets ofparticular projects or specific investment activity, usufruct and services.Sunnah: Literally, custom, habit or way of life. Technically, it refers to actions, sayings and utterancesof the holy Prophet Muhammad (pbuh), or actions of others tacitly approved by him, as reported inthe books of Hadith.T‘azir: Punishments not expressly provided in the Holy Qur’ān and Sunnah; awarded by a judge athis own discretion, keeping in mind the severity of the crime.T‘aliq: Conditions which suspend a contract to any future event.Ta’mein: Arabic word used for insurance.Tabarru‘: Benefits given by a person to another without getting anything in exchange. For example,gracious repayment of debt, absolutely at the lender’s own discretion and without any prior conditionor inducement for reward is covered under Tabarru‘. Repaying a loan in excess of the principal andwithout a precondition is commendable and compatible with the Sunnah of the holy Prophet (pbuh).But it is matter of individual discretion and cannot be adopted as a system, because this would meanthat a loan would necessarily yield a profit, making it usurious.Tabzir: Spending wastefully on objects which have been explicitly prohibited by the Sharī´ah, irrespectiveof the amount of expenditure (see also Isrāf).