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19 Cards in this Set
- Front
- Back
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Wikala Model |
Bank acts purely as a wakil (agent) of investors and manages funds for a fee. Investors deposit money and bank invests. |
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Jo'alah |
Offering a service for a fee or commission. Examples include: advisers, asset management, consulting. |
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Two-windows Model |
Model divides liabilities side into two windows; one for demand deposits and the other for investment balances. Requires 100% reserve for demand deposit because it is amanah (trust). |
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Wikala |
Designating a person or a legal entity to act on one's behalf for a particular task.
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Islamic banking system |
-stock market and banking sector -no debt market; replaced with asset-based security market |
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Two-tier Mudarabah Model |
both mobilization and utilization of funds are conducted on the basis of profit sharing among the investor, the bank, and the user -1st tier: contract between investor and bank; investor provides money for bank to invest; profits shared. -2nd tier: represents mudarabah contract between the bank and the entrepreneurs |
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Murabahah |
a financier buys raw materials on behalf of the entrepreneur and sells it to them after adding a mark-up. Must be a result of an original sale and financier must take ownership of the product. |
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Musharakah
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Partnership of parties with capital; profits/losses are shared according to predetermined ratio |
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Diminishing musharakah |
A financier and a client participate in joint ownership of property, equipment, and enterprise. As client pays rent, financier's ownership diminishes and client's increases |
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Mudarabah |
An agent with capital develops a partnership with an agent with skills (labour); profits are shared and losses are borne generally by the financier. |
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Ijarah |
Contract that gives the right to use an asset for a fixed period. The lessor must own the asset and if the lessee fails to make payment, lessor can revoke the contract and claim contract price |
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Ijarah wa qitna |
Similar to ijarah, except lessor promises to sell lessee the asset at the end of contract |
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Salam |
Seller undertakes to supply goods to the buyer at a future date in exchange of immediate payment of the full price; the quality, quantity, and delivery date must be specified. |
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Amanah |
One party is entrusted with the custody of another person's property; the keeper cannot use the asset |
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Takaful |
Islamic insurance |
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Wadia |
One person keeps his or her property with another person for safe keeping and allows the trustee to use it without the intention of receiving a return |
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Gharar |
Lack of information or information asymmetry; Uncertainty with respect to quantity, quality, recoverability, or existence.
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Istisna' |
A sale contract whereby the purchaser asks the seller to manufacture a specifically defined product at a given price; payment can be made at the time of contracting, in installments, or can be deferred. |
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Sukuk |
Islamic bonds |
