Islamic finance

Sharia-compliant late-payment penalty: the customer irrevocably undertakes to donate a fixed amount or percentage on each overdue installment, paid to charity under ISSC supervision — never kept as bank income.

Monetization structure in which the bank buys commodities and sells them to the customer at cost plus profit on deferred terms, and the customer on-sells them to generate cash.

Payment arrangement in a Murabaha where the sale price is paid over time rather than on the spot.

The remaining deferred price owed by the customer under the Islamic finance structure, used as the base for early settlement calculation.

Forward lease used for under-construction property: the bank leases a precisely described property that does not yet exist, with the lease commencing on completion and handover.

Gift contract by which the bank transfers property ownership to the customer at the end of the finance term once all obligations are fulfilled.

CBUAE authority that sets rules, standards and general principles for Shari'ah-compliant business and supervises internal Shari'ah committees.

Sharia lease contract in which the bank purchases the property and leases it to the customer for an agreed rental over the finance term.

Lease-ending-in-ownership structure: the bank owns and leases the property and transfers ownership to the customer at the end of the lease term once all obligations are met.

Body of Islamic-finance scholars appointed by an Islamic financial institution to independently supervise its transactions, activities and products for Shari'ah compliance.

The Sharia-compliant banking division or window of a conventional bank offering Islamic home finance products.

Manufacturing/construction contract under which the bank commissions the developer or contractor to construct the property to specification, typically paired with Forward Ijara.

Profit-sharing investment partnership under which the takaful operator invests the Tabarru fund's assets in exchange for an agreed share of the profits.

Cost-plus sale contract in which the bank sells an asset to the customer at cost plus a disclosed profit, payable on deferred terms; used alongside Ijarah in UAE home finance.

The agreed deferred sale price in a Murabaha, equal to the bank's cost price plus the disclosed Murabaha profit.

Token price at which the bank sells the property to the customer on successful completion of the Ijarah term under the sale undertaking.

Structure in which the bank purchases the property from the customer or a third party and leases it back to the customer under the agreed payment plan.

Mortgage finance structured per Shari'ah principles; Circular 31/2013 applies equally, alongside requirements of Shari'ah advisory committees per financing mode.

Designation that a product's structure, documentation and fees have been approved as conforming to Islamic law by the Sharia committee.

Immediate settlement basis on which the bank pays the purchase price to the developer/owner at the same time the sale takes place.

The donation contract underpinning takaful: participants irrevocably donate their contributions to the mutual fund for the benefit of members who suffer covered events.

The donation fund into which takaful participants pay their tabarru (donation) contributions and from which takaful benefits are paid to beneficiaries.

An internal agency investment account holding proceeds (e.g. commodity on-sale proceeds under a credit-card Murabaha) whose returns offset the customer's Murabaha profit.